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Showing 21 to 40 of 1558 Records
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2017 (2) TMI 1543
Interpretation of statute - rule of Harmonious Construction - Maintainability of appeal - appealable order under Order XLIII of the CPC or not - Prayer for new documents filed alongwith the affidavits by way of examination-in-chief of new witnesses of the plaintiffs be taken on record.
It was submitted that the proviso to Section 13(1) of Commercial Courts, Commercial Division and Commercial Appellate Division of High Courts Act, 2015 is clearly applicable and it specifically provides that no appeal shall lie to a Commercial Appellate Division unless the impugned order is not specifically enumerated in Order XLIII CPC.
HELD THAT:- An appeal under the Letters Patent is barred under Section 13 of the said Act, unless an appeal was specifically provided under the Arbitration and Conciliation Act, 1996. In the context of the present case, this would translate to the statement that an appeal under the Letters Patent (or under the Delhi High Court Act, 1966) is barred under Section 13 of the said Act, unless an appeal was specifically provided under the CPC. In that case, the court went on to hold that such an appeal was provided under the said 1996 Act and, therefore, an appeal would be maintainable before the Division Bench. But, in the present case the impugned order is not appealable under the CPC. Therefore, the appeal would not be maintainable.
It is clear that the view that has been taken does not, in any way, militate against the decision of the Supreme Court in Arun Dev Upadhyaya [2016 (9) TMI 1610 - SUPREME COURT]. The said decision recognized the fact that Section 13 bars an appeal under the Letters patent and, consequently, under any other law for the time being in force unless an appeal was specifically provided under the said 1996 Act which, in the present case, would be relatable to the said Act and the CPC. It is clear that from the wordings used in Section 13 that insofar as orders are concerned, appeals shall lie only from such orders that are specifically enumerated under Order XLIII of CPC. Section 13(2) further fortifies the position that no appeal shall lie from any order or decree of a Commercial Division or a Commercial Court otherwise than in accordance with the provisions of this Act.
A provision such as the said Section 10 is expressly excluded by Section 13(2) of the said Act read with the proviso to Section 13(1) which specifically enumerates appealable orders to be those specified in Order XLIII CPC.
The proviso to Section 13(1) explicitly provides that an appeal shall lie from such orders that are specifically enumerated under Order XLIII of CPC. Section 13(2) makes it further clear that no appeal shall lie from any Order or decree of a Commercial Division or a Commercial Court otherwise than in accordance with the provisions of the said Act notwithstanding anything contained in any other law for the time being in force or in a Letters Patent of a High Court. When the provisions of a statute are explicit and the intendment of the legislature is clear, there is no question of trying to resolve an imagined conflict between the provisions by employing the rule of harmonious construction.
Thus, if the interpretation of the appellants were to be accepted then we would have to read Section 13 sans the proviso to Section 13(1) and sans Section 13(2). That, surely, could not have been the intention of the legislature!
Appeal not maintainable and is dismissed.
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2017 (2) TMI 1542
Addition of unexplained investment towards purchase of plot - on money on the purchase of the vacant plot - as per assessee agreement made in respect of plot did not materialise - As per revenue cancellation agreement was found in post search operations and is fabricated document - HELD THAT:- The assessee is an individual. The assessee is in the business of colonization. The assessee purchases agricultural land from farmers and then the formalities of the Rajasthan Land Revenue Act and JDA Act is completed for conversion of land from agricultural to non agricultural use and further colony is planned and map is got approved from JDA. Subsequently, the plots of different size are sold to the customers and development work like construction of road, providing electric line water supply etc are done by the assessee as per the norms of JDA - The assessee filed regular return u/s 139(1).
The seller Shri Subhash Chand Bansal had given a statement on oath that he had received Rs. 65 lacs only. The agreement with construction was cancelled and the cancellation agreement was also seized during the search operation. The seller stated that there was no construction and no water and electric connection which is also established by Google earth Maps and photographs placed in the paper book.
There is no evidence of payment of any on money on the purchase of the vacant plot. No statement of assessee was recorded during search operation while she was present at the time of search. The cancellation agreement was found and seized during search operation itself. Therefore, its authenticity cannot be doubted when the Revenue had not been able to establish otherwise.
Therefore, looking all we find that the lower authorities have erred in confirming the addition of Rs 76.00 lacs on account of unexplained investment in purchase of Plot No. 281, 10B, Gopal Pura Bye Pass, Jaipur. Thus we do not concur with the findings of the ld. CIT(A). Hence ,the ground raised by the assessee are allowed.
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2017 (2) TMI 1541
Demand of differential duty alongwith interest and penalty - finalization of assessments or not - importer did not produce any documents to show the fact of final assessment - HELD THAT:- There have been factual mistakes in the impugned order. The impugned order wrongly notes that provisional assessments were finalized and the goods were finally assessed.
When the goods have not been finally assessed, the findings given in the impugned order cannot be sustained - the impugned order is set aside and the matter is remanded to the Commissioner for denovo adjudication within four months of the receipt of this order after giving fresh opportunity of personal hearing and submissions of documents to both the sides.
The appeal is allowed by way of remand.
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2017 (2) TMI 1540
Enhancement by CIT(A) - addition under the deeming provisions of Section 50C - CIT(A) not only confirmed action of the AO but also directed the AO to make an addition in respect of cost of acquisition as there was variation in the figures of cost of acquisition as per record vis-a-vis the lease deed - HELD THAT:- A co-ordinate bench of this Tribunal in the case of M/s. Monga Metal Pvt. Ltd[2013 (8) TMI 1179 - ITAT LUCKNOW] has held that such an action of the AO i.e. of proposing enhancement without putting the assessee to specifically notice in this regard is unsustainable in law as provisions of section 251(2) categorically says that the Commissioner (Appeals) shall not enhance an assessment or a penalty or reduce the amount of refund unless the appellant has had a reasonable opportunity of showing cause against such enhancement or reduction. Therefore, it is incumbent upon the ld. CIT(A) for affording a reasonable opportunity of showing cause against enhancement to the assessee.
If he fails to afford an opportunity to the assessee, enhancement made by him is not sustainable in the eyes of law. In the light of these facts, enhancement made by the ld. CIT(A) is not sustainable as it was done without issuing a show cause against enhancement to the assessee. We, therefore, find no merit in the additions.
Whether the provisions of section 50C can be invoked in respect of the lease hold property? - As this issue is no longer res integra, there are several decisions of this Tribunal including the case of DCIT vs. Tejinder Singh [2012 (3) TMI 47 - ITAT, KOLKATA], Atul G. Puranik [2011 (5) TMI 576 - ITAT, MUMBAI] in support of the proposition. Hon’ble Delhi High Court in the case of CIT vs. Shri Kishan Das [2014 (2) TMI 897 - DELHI HIGH COURT] has approved this school of thought and inter alia observed strictly construed the letter of Section 50C to say that the conveyance has to be complete in respect of all entitlements to the property. In the present case, the Tribunal has upheld the valuation of the assessee. We notice that apart from the three Benches, decisions of which have been relied on, the Tribunal also considered the distinction made between Section 50C and 54D(1) which specifically provides that capital gains from, transfer by way of compulsory acquisition under any law of capital asset being land, building or any right in the land or building
Section 50C, on the other hand, talks of, transfer by assessee of a capital asset being land or building or both. The contrast in language, given that Section 50C is a specific provision, which seeks to enact a presumption is significant. The valuation of the concerned State agency or the government that the cost of the land is, in the circumstances, higher, is determinative. We notice that in the present case, there has been no such valuation. That apart, the Tribunal adopted an approach which, with respect, appears to be correct, in that it took note of the proportionate transfer of leasehold rights for 54 years. If the Revenue’s contentions were to be conceded, then in the given facts of case, if the leasehold rights for residual period of 3 or 4 years were to be valued at par with the cost of acquisition of the full tenure of the lease of 90 years, absurd and anomalous results would ensue.
Thus both the grievances of the assessee indeed deserve to be upheld. Neither the learned CIT(A) was justified in confirming the action of the Assessing Officer in treating the stamp duty valuation as consideration for transfer for the purpose of computing capital gain, nor was he justified in proposing enhancement of income regarding reduction in the cost of acquisition without putting assessee to notice in this respect. We, therefore, uphold the plea of the assessee.
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2017 (2) TMI 1539
Scope and purport of Section 173(8) Code of Criminal Procedure - High Court interfered with the order of the Magistrate permitting further investigation by the police in the case and ordered for expeditious disposal of the trial.
Whether it was permissible for the investigating officer or the officer-in-charge of the police station to undertake a further investigation even after the filing of the charge sheet?
HELD THAT:- It noted as well that Under Section 173(2)(i), the officer in-charge, as soon as the investigation is completed, is required to forward to the Magistrate empowered, a report in the prescribed form so as to enable the Court to take cognizance of the offence based thereon. This Court also adverted to Section 190 enumerating the modes of taking cognizance of an offence by a Magistrate, as specified therein, either upon receiving a complaint of facts which constituted such offence or upon a police report of such facts or upon information received from any person other than a police officer or upon his own knowledge that such offence had been committed.
In the conspectus of the provisions of Code of Criminal Procedure traversed, this Court held the view that an informant who lodges the first information report does not fade away therewith and is very much concerned with the action initiated by the officer in-charge of the police station pursuant thereto, so much so, that not only a copy of the said report is to be supplied to him free of cost and in case, no investigation is intended, he has to be notified of such decision. The reason, in the contemplation of this Court, for the officer in-charge of a police station to communicate the action taken by him to the informant and a report to the Magistrate Under Section 173(2) Code of Criminal Procedure was that the informant, who sets the machinery of investigation into motion, was required to know what was the result of the exercise initiated on the basis thereof, as he would be vitally interested therein and hence, the obligations cast by law on the officer in-charge.
This Court recounted its observations in Ram Lal Narang [1979 (1) TMI 241 - SUPREME COURT] to the effect that on the Magistrate taking cognizance upon a police report, the right of the police to further investigate even under the 1898 Code was not exhausted and it could exercise such right often as necessary, when fresh information would come to light. That this proposition was integrated in explicit terms in Sub-section (8) of Section 173 of the new Code, was noticed. The desirability of the police to ordinarily inform the Court and seek its formal permission to make further investigation, when fresh facts come to light, was stressed upon to maintain the independence of the judiciary, the interest of the purity of administration of criminal justice and the interest of the comity of the various agencies and institutions entrusted with different stages of such dispensation.
After referring to Section 156(3) in particular and Section 190 Code of Criminal Procedure, this Court reverted to Section 173 and ruled that a very wide power was vested in the investigating agency to conduct further investigation after it had filed its report in terms of Sub-section (2) thereof. It held on an elucidation of the contents of Section 173(8) that the investigating agency was thus competent to file a report supplementary to its primary report and that the former was to be treated by the Court in continuation of the latter, and that on an examination thereof and following the application of mind, it ought to proceed to hear the case in the manner prescribed. It was elaborated that after taking cognizance of the offence, the next step was to frame charge in terms of Section 228 of the Code unless the Court found, upon consideration of the record of the case and the documents submitted therewith, that there did exist no sufficient ground to proceed against the accused, in which case it would discharge him on reasons to be recorded in terms of Section 227 of the Code - The view of this Court in AMIT KAPOOR VERSUS RAMESH CHANDER & ANR. [2014 (1) TMI 1042 - SUPREME COURT] underlining the obligation of the Court to consider the record of the case and the documents submitted therewith to form an opinion as to whether there did exist or not any sufficient ground to proceed against an Accused was underlined.
From the issues sought to be answered in this decision and having regard to the overall text thereof, it is not possible to discern that the power of the Magistrate, even at the post cognizance stage or after the Accused had appeared in response to the process issued, the suo motu power of the Magistrate to direct further investigation was intended to be expounded thereby. Significantly, the adjudication was essentially related to the pre-cognizance stage.
On an overall survey of the pronouncements of this Court on the scope and purport of Section 173(8) of the Code and the consistent trend of explication thereof, we are thus disposed to hold that though the investigating agency concerned has been invested with the power to undertake further investigation desirably after informing the Court thereof, before which it had submitted its report and obtaining its approval, no such power is available therefor to the learned Magistrate after cognizance has been taken on the basis of the earlier report, process has been issued and Accused has entered appearance in response thereto - the un-amended and the amended Sub-section (8) of Section 173 of the Code if read in juxtaposition, would overwhelmingly attest that by the latter, the investigating agency/officer alone has been authorized to conduct further investigation without limiting the stage of the proceedings relatable thereto. This power qua the investigating agency/officer is thus legislatively intended to be available at any stage of the proceedings. The recommendation of the Law Commission in its 41st Report which manifesting heralded the amendment, significantly had limited its proposal to the empowerment of the investigating agency alone.
The direction for investigation by the Magistrate Under Section 202, while dealing with a complaint, though is at a post-cognizance stage, it is in the nature of an inquiry to derive satisfaction as to whether the proceedings initiated ought to be furthered or not. Such a direction for investigation is not in the nature of further investigation, as contemplated Under Section 173(8) of the Code. If the power of the Magistrate, in such a scheme envisaged by the Code of Criminal Procedure to order further investigation even after the cognizance is taken, Accused persons appear and charge is framed, is acknowledged or approved, the same would be discordant with the state of law - Not only such power to the Magistrate to direct further investigation suo motu or on the request or prayer of the complainant/informant after cognizance is taken and the Accused person appears, pursuant to the process, issued or is discharged is incompatible with the statutory design and dispensation, it would even otherwise render the provisions of Sections 311 and 319 Code of Criminal Procedure, whereunder any witness can be summoned by a Court and a person can be issued notice to stand trial at any stage, in a way redundant.
Appeal dismissed.
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2017 (2) TMI 1538
Condonation of delay - ITA filed after 613 days and other after 707 days - Revenue aggrieved by the order of ITAT which allowed the assessee’s appeal, holding that the exercise of Section 263 not warranted - HELD THAT:- In both instances, the explanation for the delay is less then convincing; the Revenue states the heavy workload of appellant, which it unable to effectively manage as well as the lack of manpower. The other reason stated is the reorganization of its panel counsel. Both did not constitute “sufficient cause” to enable the Court to condone the delay. The applications and appeals are accordingly dismissed.
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2017 (2) TMI 1537
TP Adjustments - international transactions in respect of payment of trade mark fee - Selection of MAM - Transactional Net Margin Method (TNMM) OR Comparable Uncontrolled Price Method (CUPM) - HELD THAT:- The following question of law arises for consideration in these appeals:-
“Did the Income Tax Appellate Tribunal (‘ITAT’) fall into error while deleting the Transfer Pricing Adjustments regarding the international transactions in respect of payment of trade mark fee and in applying the Transactional Net Margin Method (TNMM) instead of Comparable Uncontrolled Price Method (CUPM)? ”
TP Adjustments - AMP Expenditure - This Court notices that AMP Expenditure was not subjected to adjustments although it was a part of the Transfer Pricing Exercise for all previous years.
The question of law framed i.e. the payment of trade mark fee and whether it needs to be subjected to adjustments, would cover the issue for the year in question given that AMP Expenditure did not result in any adjustments in respect of the same transactions for all previous years. The other questions of law, therefore, do not arise.
List for hearing on 18.04.2017.
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2017 (2) TMI 1536
Disallowance u/s 14A - AO computed the disallowance in both the years u/r. 8D(2)(iii) of the I.T. Rules at 0.5% of average value of investment - CIT(A) took the view that investments made by the assessee are in the form of strategic investments and accordingly directed AO to compute the disallowance at 5% of the fixed/semi variable expenditure incurred by the assessee - HELD THAT:- As counsel submitted that AO had made identical disallowance in A.Y. 2009-10 also, which was reduced to 5% of the fixed/semi variable expenses by the order passed by the learned CIT(A). Revenue took the matter to the Tribunal and the Tribunal [2014 (11) TMI 1274 - ITAT MUMBAI] has confirmed the order passed by the learned CIT(A) and accordingly dismissed the appeal filed by the Revenue.
AR submitted that the learned CIT(A) has followed its own order passed in A.Y. 2009-10 in the years under consideration also. DR did not controvert the factual aspects presented by learned AR
In view of consistent with the view taken by the coordinate Bench of the Tribunal in A.Y. 2009-10, we confirm the order passed by the learned CIT(A) in the years under consideration also.
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2017 (2) TMI 1535
Accrual of income - Arbitration receipts - assessee has shown arbitration receipts in his books of accounts under the head “Current liabilities” and has not credited the same in the profit/loss account - As per AO arbitration receipts cannot be treated as liability till the order of Supreme Court is received against the assessee and the same receipts was accordingly treated as income of the assessee and brought to tax - HELD THAT:- Where the challenge to the arbitral award ends in favour of the assessee, the Revenue would be entitled to bring the same to tax. Conversely, where the challenge to the arbitral award ends against the assessee, the State of Rajasthan would be entitled to encash the bank guarantee and recover the amount paid to the assessee.
As in the instant case, the amount received by the assessee cannot be regarded as income which has accrued unless and until the proceedings relating to arbitral award attains finality. Besides that, even from well-established accounting principles and accrual system of accounting as followed by the assessee, where the probability of receipts in favour of the assessee is contingent on final outcome of Court’s proceedings, such contingent receipts have rightly been shown as liability and not reflected as taxable receipts in the profit/loss account.
Similar issue was involved in AY 2004-05 wherein as held such interim arbitration receipts pending final outcome as not taxable - Decided against revenue.
Accrued interest on FDRs not declared as income by the assessee - assessee has not shown the interest accrual on FDRs made for giving bank guarantee in his return of income for the year under consideration - AO computed interest @ 7% and brought the same to tax in addition to arbitration receipts - CIT-A deleted the addition - HELD THAT:- CIT(A) has given a finding that the assessee has shown net interest in his profit/loss account which comprises of gross interest received including interest on FDRs and interest paid to Bank. The said finding has not been controverted before us. No infirmity in the order of ld CIT(A) in deleting the addition.
Decided against revenue.
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2017 (2) TMI 1534
Exemption u/s 11/12 - Receipt in the nature of Fee from Professional/ Technical Services/ Contractual receipts and, therefore, commercial in nature - donation had been given to the assessee to promote the objects of the NASSCOM and not for any charity - As per AO activities were clearly in the nature of trade and commerce and rendering services in relation to trade/ commerce/ business more particularly because assessee had charged service tax on the amount so received by it - As per assessee it was setup with the predominant objective to improve national capabilities by promoting data protection, develop security and privacy codes and standards and encourage implementation of the same - HELD THAT:- Activities undertaken by assessee are in the field of cyber security for increasing level of security and privacy of IT and BPO service providers in public life to ensure that India is secure destination.
Potential of cyber threats is increasingly recognized for their impact on the lives of individuals, as attacks are increasingly targeting critical infrastructure like, utilities, transport, oil and energy and hence the ability to disturb social harmony and interactions, urge to cause unrecoverable damages to businesses and ability to harm national security posture. Admittedly, the assessee is imparting very valuable services in this regard and training officials of police, banking, and other personnel in technical field. The grants received by assessee are mainly from Government.
One of the major objections of Assessing Officer was that assessee was imparting services to NOSSCOM. This objection is devoid of any merit because it is the predominant object of assessee which is to be examined for deciding whether the assessee was carrying on charitable activities or not. The assessee was registered u/s 25 of the Companies Act which clearly shows that it could not carry on any activities for profit purposes. It is well settled law that while carrying on pre-dominant objects, if the assessee is earning some incidental surplus that will not prejudice the assessee’s claim of being charitable in nature - Appeal of the Department is dismissed.
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2017 (2) TMI 1533
Seeking waiver of the deposit as required in terms of Section 19 of the MSMED Act - Validity of Arbitral Award - competency of FC was to act as an Arbitral Tribunal (AT) notwithstanding the arbitration clause in the contract between the parties - liability of Alstom to pay REPM - liability to pay interest under Section 16 of the MSMED Act.
HELD THAT:- Section 8 of the MSMED Act envisages two possible situations; one is where a unit which has not yet come into existence, and the second is where the unit is in existence. Where a unit is yet to be established, Section 8(1) requires filing of the memorandum in the manner specified by the State or the Central Government, as the case may be. Where a unit has already been established prior to the commencement of the MSMED Act, then the proviso applies and the memorandum has to be applied within 180 days from the date of commencement - It, however, does not mean that a third category i.e., a unit that is established after the commencement of the Act cannot seek registration as a supplier. That could never have been the intention of the legislature as is evident from the Statement of Objects and Reasons of the MSMED Act.
The case on hand falls in the third category where a supplier is already in existence at the time of commencement of the Act but has not obtained any registration till then. It is registered as a supplier beyond 180 days from the date of the commencement of the Act i.e., after 180 days from 2nd October, 2006. Clearly, such a unit can also seek registration as a supplier. That is precisely what has happened in the present case. The certificate issued to the REPM is dated 4th April, 2012, but importantly, it notifies that the date of commencement of the activities as 1st February, 2009.
Whether having been registered on 4th April, 2012, can REPM take advantage of the MSMED Act? - HELD THAT:- The supplies made by REPM to Alstom in terms of the PO dated 8th September, 2009 continued even after REPM's registration as supplier as is evident from the two MoMs dated 1st May, 2013 and 28th December, 2013. The result is that REPM can seek the application of the beneficial provisions of MSMED Act as far as its claims against Alstom arising from the said First PO are concerned.
In the present case, therefore, the Court is satisfied that the MSMED Act to the extent it provides for a special forum for adjudication of the disputes involving a 'supplier' registered thereunder, overrides the Act i.e., the Arbitration and Conciliation Act 1996. The following observations in Snehadeep Structures Pvt. Ltd. v Maharashtra Small Scale Industries Development Corporation Ltd. [2010 (1) TMI 1223 - SUPREME COURT] which dealt with the statute of 1993 preceding the MSMED Act equally applies to the MSMED Act. It was held that the legislative intent behind Section 7 was to target buyers, who, only with the end of pushing off the ultimate event of payment to the small-scale industry undertaking, institute challenges against the award/decree/order passed against them. Such buyers cannot be allowed to challenge arbitral awards indiscriminately, especially when the section requires predeposit of 75% interest even when appeal is preferred against an award, as distinguished from an order or decree.
Likewise, in Edukanti Kistamma (Dead) through LRs. v. S. Venkatareddy (dead) through LRs [2009 (12) TMI 1050 - SUPREME COURT], the Supreme Court explained that a special statute would be preferred over a general one where it is beneficial. It was explained that the purport and object of the Act must be given its full effect by applying the principles of "purposive construction.” The question whether the dispute resolution mechanism under Section 18 of the MSMED Act overrides the arbitration clause under the contract has to be answered in the affirmative.
Thus, the Court negates the plea of the Petitioner that the MSMED Act does not apply. Consequently, the question of the Petitioner seeking a waiver of the requirement of depositing 75% of the amount in terms of Section 19 of the MSMED Act does not arise.
Whether, in terms of the provisions of Section 19 of the MSMED Act, the Court can set any reasonable terms for the deposit to be made? - HELD THAT:- Considering the amount involved, the Court directs that 75% of the amount awarded by the FC in favour of the Respondent should be deposited by the Petitioner in this Court, in four equal instalments with each instalment being deposited before the 10th of every succeeding month hereafter. The amount as and when deposited by the Petitioner shall be kept by the Registry in a fixed deposit initially for a period of six months and kept renewed during the pendency of the petition. The hearing of the main petition will be subject to compliance with the above direction.
Application disposed off.
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2017 (2) TMI 1532
Addition on account of purchases made in contravention of provisions of Section 40A(3) - assessee had purchased in cash gold and silver - assessee has filed his return u/s 44AF - HELD THAT:- From perusal of records, it transpires that the issue under consideration has already been decided by the Coordinate Bench of the ITAT in assessee’s own case [2016 (4) TMI 1440 - ITAT JAIPUR],[2016 (10) TMI 1373 - ITAT JAIPUR] for the assessment years 2006-07 and 2007-08 wherein respectfully following the decision of ITAT Ahemdabad Bench in the case of Gopalsingh R Rajpurohit [2004 (7) TMI 271 - ITAT AHMEDABAD] hold that once the assessee has filed his return u/s 44AF, no further disallowance can be made u/s 40A(3). It is noteworthy that in this case no trading irregularity was found and addition has been sustained only on technical issue of Section 40A(3) of the Act. The presumptive system of tax u/s 44AF starts with nonobstante clause and overrides other provisions. In view thereof, there is no justification in making the addition which is deleted. Since the addition is deleted on merits, there is no need to go into alternative ground. Thus the appeal of the assessee is allowed.
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2017 (2) TMI 1531
Validity of Arbitral Award - fraud or coercion - it is alleged that the Consent Terms were executed under pressure or coercion and were executed by the Petitioner herein on the basis that the Respondent would comply with its obligations under the MOU, which allegedly had not been done by the Respondent herein - Section 34 of the Arbitration and Conciliation Act, 1996 - HELD THAT:- First and foremost there is no case pleaded of ‘fraud’ having been played upon the Petitioner herein while executing the Consent Terms. The case is one of coercion, which in itself is bereft of any material particulars. It is not enough for a party to simply come to Court and aver coercion. For over four months after passing of the Award, and despite being well aware of the same, no objection was raised by the Petitioner herein to the effect that the Consent Terms were entered into under coercion. In fact, the matter remained pending before the learned Arbitrator only for the purpose of paying fees of the Tribunal. Even as late as on 16th July 2015 the Advocates for the Petitioner herein appeared before the learned Arbitrator and made no attempt to resile from the Consent Terms but simply sought time to seek instructions for making payment of the Arbitrator's fees.
It is alleged by the Petitioner that the Respondent has in fact not complied with the terms of the MOU and on this ground alone, the Consent Terms must fail and the Award ought to be set aside. I cannot accept this submission. As is ex facie evident, the Consent Terms nowhere refer to the MOU. A reading of the Consent Terms shows that the payment terms therein were not conditional or contingent upon compliance with any terms of the MOU. I am not required to go into the question of whether the Respondent complied with the MOU, in as much as even assuming for argument's sake there had been non-compliance of the MOU by the Respondent, the Consent Terms, and accordingly the impugned Award, are not contingent upon the compliance with the MOU.
Pertinently, even the resolution dated 16th March 2015 passed by the Board of Directors of the Petitioner herein authorizing the filing of the Consent Terms and the passing of the Award in terms thereof, makes no reference to the MOU, which in any event came to be executed only subsequently. Even assuming that the Petitioner herein has a grievance about any alleged non-compliance with the MOU, by the Respondent, the remedy of the Petitioner herein lies elsewhere, and this cannot be a ground to set aside the Award passed by consent of parties.
The grounds urged by the Petitioner herein are unsustainable and appear to be an attempt to belatedly renege on the Consent Terms incorporated in the Award dated 18th March 2015 - Petition dismissed.
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2017 (2) TMI 1530
Jurisdiction of High Court - whether FIR and the consequential proceedings alleging non-compoundable offences could be quashed by the High Court in exercise of its jurisdiction Under Section 482 of Code of Criminal Procedure on the basis of the settlement arrived at between the complainant and the Respondents-accused? - Doctrine of judicial restraint.
HELD THAT:- Since the present case pertains to the crucial doctrine of judicial restraint, we are of the considered opinion that encroaching into the right of the other organ of the government would tantamount clear violation of the Rule of law which is one of the basic structure of the Constitution of India.
Considering the law relating to the continuance of criminal cases where the complainant and the Accused had settled their differences and had arrived at an amicable arrangement, there is no reason to differ with the view taken in Manoj Sharma's case [2008 (10) TMI 690 - SUPREME COURT] and several decisions of this Court delivered thereafter with respect to the doctrine of judicial restraint. In concluding hereinabove, we are not unmindful of the view recorded in the decisions cited at the Bar that depending on the attendant facts, continuance of the criminal proceedings, after a compromise has been arrived at between the complainant and the accused, would amount to abuse of process of Court and an exercise in futility since the trial would be prolonged and ultimately, it may end in a decision which may be of no consequence to any of the parties.
Appeal dismissed.
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2017 (2) TMI 1529
Seeking recall of the order - during the course of arguments, full facts were brought to the knowledge of the Bench, or not - HELD THAT:- On perusal of record, it appears that the Tribunal has passed the order on merit where the appellant view was also considered. Regarding the more facts it can be presumed that this is the afterthought. Remedy lies somewhere else.
Hence, when the speaking order was passed on merit, then there are no merit in the application where request is made for recalling of the order - the RoA application is rejected.
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2017 (2) TMI 1528
Reopening of assessment u/s 147 - notice after expiry of four years from the end of the relevant assessment years - HELD THAT:- As per section 147, if the AO has reason to believe that any income chargeable to tax has escaped assessment he may assess or re-assess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings provided that where an assessment under sub section (3) of section 143 or section 147 has been made for the relevant assessment year, no action shall be taken u/s 147 after expiry of four years from the end of the relevant assessment years unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return u/s 139 or in response to notice issued u/s 142 (1) or section 148 or to disclose fully and truly all material facts necessary for his assessment for the assessment year.
We noticed that in the present case the AO has not pointed out any failure on the part of the assessee in making disclosure fully and truly all material facts necessary for the assessment, which is a condition precedent for exercising jurisdiction u/s 147 of the Act.
From the contents of the reasons recorded aforesaid it cannot be inferred that there was any failure on the part of the assessee in disclosing full and true material facts necessary for his assessment for the assessment year under consideration. Hence, we find merit in the contention of the assessee that since there is no failure on the part of the assessee in disclosing all material facts fully and truly, the reopening is bad in law. We, therefore, hold that the action of reopening in this case is not in accordance with the expressed provisions of the Act.
AO has not followed the law laid down by the Hon’ble Supreme Court in GKN Driveshaft India Ltd. [2002 (11) TMI 7 - SUPREME COURT] the reassessment order cannot be passed without passing speaking order on objection filed by the assessee - We notice that the assessee after receiving copy of reasons recorded filed return of income as well as objection of initiation of reassessment proceeding vide letter dated 25.04.2013. But the AO without passing any speaking order on objection filed by the assessee, proceeded further and passed order u/s 143 (3) r.w.s. 147 of the Act. So it is apparent that the AO has not followed the law laid down by the Hon’ble Supreme Court in the aforesaid case.
Subjective satisfaction of the AO to the effect that any taxable income has escape assessment - In Indian and Eastern Newspaper Society [1979 (8) TMI 1 - SUPREME COURT] the Hon’ble Supreme Court has held that audit objection cannot be the basis for reopening of assessment. In view of the facts and circumstances of the case and the law laid down by the Hon’ble Supreme Court and various High Courts, it can be concluded that in the present case the AO has exercised the jurisdiction u/s 147 without his own satisfaction, which is the condition precedent for initiating proceeding u/s 147 if the Act.
We agree with the Ld. Counsel for the assessee that the proceedings u/s 148 cannot be initiated to review the earlier opinion. It is well settled law that when deduction u/s 80 IB (10) was allowed in original assessment after considering all the facts the same cannot be withdrawn by invoking section 147 of the Act. In this case, the AO had allowed the deduction in question in original assessment after considering all the facts and details submitted by the assessee.
Fees paid to Chitnis Vaithy & Co is concerned we notice that the assessee vide letter 18.03.2014 submitted the certificate dated 18.01.2001 issued by the said company TDS Ledger Account, Bank Payment voucher etc. to prove that the said company had provided solicitor for the project of the assessee company, it cannot be said that no tax has been deducted at source.
As regards payment made to M. R. Patil Consulting Engineering Ltd. there is merit in the assessee’s contention of the Ld. counsel that expenditure is allowable in the current year as the assessee has been following the project completion method and since it was allowed in the earlier year the AO cannot change his stand by exercising powers u/s 147 of the Act. As per the settled law assessment cannot be reopened only because of change of the opinion.
Thus we hold that the reassessment proceedings u/s 147 initiated in this case is bad in law. - Decided in favour of assessee.
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2017 (2) TMI 1527
Allocation of sum of Rs. 10 Crores for payment to the affected employees for payment on account of various reasons such as marriage of daughters, ailment, old age disease, payment of loan etc. - Company incorporated under the Companies Act is a juristic person which has a distinct and separate entity or not - Whether the State of Bihar being a sole shareholder of the Boards, Corporations or the Companies incorporated under the Companies Act, 1956 have the responsibility to pay salary and allowances of the employees of the Boards, Corporations and Companies who are unable to pay salary on account of financial constraints? - HELD THAT:- A precedent is a judicial decision containing a principle, which forms an authoritative element termed as ratio decidendi. An interim order which does not finally and conclusively decide an issue cannot be a precedent. Any reasons assigned in support of such non-final interim order containing prima facie findings, are only tentative. Any interim directions issued on the basis of such prima facie findings are temporary arrangements to preserve the status quo till the matter is finally decided, to ensure that the matter does not become either infructuous or a fait accompli before the final hearing.
The resume of the precedents on the issue of the liability of the State Government to pay salary and allowances of the employees of the Boards, Corporations and the Companies of which State is a shareholder and are State within the meaning of Article 12, that there is unanimity that the State Government is not liable to pay salary and allowances as they are separate juristic entity. Therefore, neither in law, as the companies are separate and distinct juristic entity than the State Government, the State cannot be directed to pay salary and wages of the employees of such juristic entity.
The judgments in Kapila Hingorani [2003 (5) TMI 359 - SUPREME COURT] and Kapila Hingorani [2005 (1) TMI 754 - SUPREME COURT] have left the question of liability of the State Government to pay salary and allowances open. The intervention of the Supreme Court was to address humane problem of financial stringency suffered by such employees. Therefore, neither the Kapila Hingorani [2003 (5) TMI 359 - SUPREME COURT] nor Kapila Hingorni [2005 (1) TMI 754 - SUPREME COURT] or Harihar Yadav's case [2013 (11) TMI 1795 - SUPREME COURT] unequivocally holds the State Government responsible for payment of salary and allowances to the employees of the Boards, Corporations and the Companies, if such Boards, Corporations and the Companies are not able to pay salary and allowances due to financial stringency on any ground whatsoever.
Whether there is any final direction on the basis of interim orders passed in Kapila Hingorani [2003 (5) TMI 359 - SUPREME COURT] and Kapila Hingorani [2005 (1) TMI 754 - SUPREME COURT], when the matter was remitted back to this Court to examine the legal issues? - HELD THAT:- In Barak Upatyaka's case [2009 (3) TMI 992 - SUPREME COURT], the Supreme Court has observed that the observations and directions in Kapila Hingorani [2003 (5) TMI 359 - SUPREME COURT] and Kapila Hingorani [2005 (1) TMI 754 - SUPREME COURT] are the interim directions based on tentative reasons and have no value as precedent. Such interim directions were given in extraordinary power under Article 142 of the Constitution - The final order of the Supreme Court is a direction to the High Court to examine the legal issues and that the legal issue requires to be examined by this Court is as to whether the State can be called upon to pay salary and allowances to the workers of the Boards, Corporations and Companies incorporated at one stage by the State Government. Therefore, the issue as to whether the State Government is liable for payment of salary and allowance has been left open by the Supreme Court for appropriate decision by this Court.
Whether the observations made in Kapila Hingorani cases are to address the humane problems faced by certain employees of the Boards and Corporations alone? - HELD THAT:- The observations in Kapila Hingorani (I) and Kapila Hingorani (II) are in fact to address the humane problem as it left the question of liability of the State open - Even in Harihar Yadav's case, the dispute was on account of bifurcation of the State and consequently, the liability of the State of Bihar and Jharkhand but again the problem was addressed as a humane problem.
Whether the judgment in Harihar Yadav's case [2013 (11) TMI 1795 - SUPREME COURT] mandates the State of Bihar to pay salary of the employees of all Boards, Corporations and Companies having huge financial burden and whether such financial burden can be passed on to the State of Bihar when the financial allocation towards the salary and allowances of the Boards, Corporations and Companies is a policy decision in economic matters? - HELD THAT:- There are no merit in the Letters Patent Appeal filed by the writ-applicants bearing L.P.A. No. 1940 of 2015. The learned Single Bench has ordered the State to deposit Rs. 10 crores to meet any financial emergency required by any of the employees is without any mechanism as to how any claim of any of the employees can be examined and paid. It is not found that such direction warrants any interference in the present Letters Patent Appeals as it is to address the humane problem but we direct that Hon'ble Mr. Justice Udai Sinha shall constitute one member Committee to disburse the said amount in accordance with law and the procedure to be devised by him.
Both the Letters Patent Appeals are dismissed.
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2017 (2) TMI 1526
Rejection of books of accounts - NP Profit estimation - A.O. estimated net profit of 7% on gross receipts net of all deductions including depreciation - HELD THAT:- Though, the assessee has maintained katcha books of accounts, which does not give true and correct profit of the business as the assessee has not accounted certain receipts from return trips.
A.O. opined that trading result disclosed by the assessee are not amenable for verification going by the fact that the assessee did not produce regular books of accounts duly supported by documentary evidence such as bills/vouchers for different items of expenditure such as diesel, driver betas, loading & unloading charges and particularly other expenses which contributes major part of the total expenditure for the assessment year under review. A.O. further influenced from the statement of the managing partner deposed an oath at the time of recording sworn deposition dated 5.2.2010 to the effect that the freight receipts others than Raasi Cements are not reflected in the books of accounts. Therefore, we are of the view that the A.O. was right in rejection of books of accounts and estimation of net profit.
NP estimation - We find that the coordinate bench of this Tribunal in the case of ITO Vs. Sri Gundapaneni Nageswara Rao [2014 (5) TMI 344 - ITAT HYDERABAD] under similar set of facts, has directed the A.O. to estimate net profit of 3% net of all deductions including depreciation. Though, there are divergent views from the appellate authorities, the view which is more beneficial to the assessee has to be adopted in view of the Supreme Court, decision in the case of CIT vs. Vegetable Products Limited [1973 (1) TMI 1 - SUPREME COURT]
Therefore, we are of the considered view that since, the assessee has not proved the ownership of assets to claim the depreciation we deem it appropriate to direct the A.O. to estimate net profit of 3% on gross receipts net of all deductions including depreciation. Accordingly, we direct the A.O. to estimate net profit of 3% on gross contract receipts net of all deductions for all the assessment years 2006-07 to 2009-10. Revenue appeal is partly allowed.
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2017 (2) TMI 1525
Application for additional impleadment of Adani Power Rajasthan Limited as a party - HELD THAT:- Issue summons on the suit and notice on the application on appropriate steps by all permissible modes to the three defendants, returnable on 19th April, 2017.
Having heard the learned senior counsel on the prayer for ex-parte ad interim injunction and having gone through the record, bearing in mind the submissions that pursuant to letters of invocations which were issued sometime in January, 2017 for subject bank guarantees No.CPBG No. 0009PR11010027 for Rs. 2,02,55,000/- and CPBG No. 0009PR11010028 for Rs. 13,70,000/- (both issued by defendant No.2) and ABG No. 07551GPER001111 for Rs. 2,10,07,460/-, ABG No. 07551GPER001011 (both issued by defendant No.3), no payment has still been made, it is directed that defendants No.2 and 3 shall not make any payment under the said bank guarantees to the defendant No.1 till next date of hearing subject, however, to the condition that the plaintiff shall be obliged to take all necessary steps to keep the said bank guarantees alive, additional costs incurred for such purpose to be subject to further orders that may be passed in the course of these proceedings.
Compliance of Order 39 Rule 3 shall be made within a week.
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2017 (2) TMI 1524
Principles of natural justice - rejection of prayer of the petitioner to cross-examine the Central Revenue Control Laboratory official on the aspect of nomenclature with regard to the raw material used in the manufacture of carbon black feedstock - HELD THAT:- Whenever there is violation of principles of natural justice, the remedy under Article 226 of the Constitution of India is not closed. In that view of the matter, even though the first order passed by the adjudicating authority has not been challenged, when the respondent authority has reiterated the same in the concluding part of the impugned order, it speaks to the fact that there is non-compliance of principles of natural justice and the petitioner has not been afforded opportunity to cross-examine to make his stand clear and to stand by his defence. Unless the same is brought on record by eliciting in cross examination, further argument, if any, raised, would be a futile exercise.
The writ appeals are partly allowed.
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