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2009 (8) TMI 1286
Issues Involved:1. Right to cross-examine a witness (CRP (PD) No. 1200 of 2009). 2. Grant of interim injunction (CRP (PD) No. 1273 of 2009). Summary:CRP (PD) No. 1200 of 2009:Background Facts: The suit in O.S. No. 469 of 2004 was filed by the first respondent for partition of the suit property into seven equal shares. The property was purchased in the name of Janakiammal by her husband K. Venkatesalu. The plaintiff contended that the will dated 8.8.2002, allegedly executed by Janakiammal, was a forgery. The defendants contested the suit, claiming the property belonged to Janakiammal and was purchased with her stridhana property. Interlocutory Application: The revision petitioners filed I.A. No. 608 of 2008 to reject the right of the first respondent to cross-examine the fifth respondent (D.W.1), arguing that there was no adverse interest between them. The first respondent countered, asserting conflicting interests. The trial Judge dismissed the application, allowing the first respondent to cross-examine D.W.1. Examination of Witnesses: According to Chapter X of the Indian Evidence Act, 1872, cross-examination is a right given to the adverse party. The trial court must consider the entire pleadings to determine adverse interest. The fifth respondent's separate suit (O.S. No. 980 of 2009) and its pleadings were also relevant to this determination. The Dispute: The main dispute involved the acquisition of the property and the validity of the will. The fifth respondent's pleadings supported the first respondent's case regarding these issues. The trial Judge's decision was based on the written statement but did not consider the subsequent suit's pleadings. Therefore, the matter requires fresh consideration by the trial court. Disposal: The order in I.A. No. 608 of 2008 is set aside, and the matter is remitted to the trial court for fresh consideration. The civil revision petition is allowed. CRP (PD) No. 1273 of 2009:Background Facts: The respondent filed O.S. No. 980 of 2009 for an injunction against the revision petitioners, claiming the property belonged to his father, K. Venkatesalu, and was in possession of the legal heirs after his death. The defendants allegedly created a forged will and mortgaged the property. Prima Facie Case: The trial Judge granted an ex parte injunction without indicating the materials considered for prima facie case, balance of convenience, and irreparable injury. The Supreme Court mandates that reasons must be recorded to ensure clarity and enable appellate review. Disposal: The order in I.A. No. 1041 of 2009 is set aside. The trial Judge is directed to consider the application on merits and dispose of it within thirty days. The civil revision petition is allowed.
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2009 (8) TMI 1285
Issues Involved:
1. Grant of interim injunction.
2. Validity of mortgage and sale certificate.
3. Jurisdiction of civil court versus DRT under SARFAESI Act.
4. Allegations of fraud and forgery.
5. Principle of res judicata.
6. Suppression of facts and clean hands doctrine.
7. Prima facie case and balance of convenience for granting injunction.
Detailed Analysis:
1. Grant of Interim Injunction:
The applicant sought an interim injunction to restrain the respondents from acting upon the sale certificate dated 15.10.2007, pending disposal of the suit. The court initially granted an ad-interim injunction, which was not continued after 8.6.2009. The court dismissed the application, stating that the applicant did not make out a case for entertaining the application and ordered costs payable to the first respondent Bank.
2. Validity of Mortgage and Sale Certificate:
The applicant contended that the company never authorized any loan from the first respondent Bank and that the documents were forged. The Bank, however, claimed that the mortgage and sale were valid, supported by personal guarantees and board resolutions. The court found that the applicant's claims were not substantiated and noted that the CBI investigation did not question the genuineness of the Udhagai property title deeds.
3. Jurisdiction of Civil Court versus DRT under SARFAESI Act:
The court discussed the jurisdictional conflict between civil courts and DRT under the SARFAESI Act. It referenced the Supreme Court judgment in Authorized Officer, Indian Overseas Bank v. Ashok Saw Mill, which clarified that DRT has the authority to scrutinize actions taken under Section 13(4) of the SARFAESI Act, including setting aside transactions and restoring possession. The court concluded that the applicant's suit was not maintainable due to the bar under Section 34 of the SARFAESI Act.
4. Allegations of Fraud and Forgery:
The applicant alleged that the Bank committed fraud by using forged documents to create an equitable mortgage. The Bank refuted these claims, stating that the mortgage was valid and supported by genuine documents. The court observed that the CBI investigation only found forgery in the Chennai property documents, not the Udhagai property, and thus the Bank's actions were not fraudulent.
5. Principle of Res Judicata:
The court emphasized that the applicant had already litigated the matter before DRT, DRAT, and the High Court, and their SLP was dismissed by the Supreme Court. Citing the principle of res judicata, the court held that the applicant could not re-litigate the same issues in the present suit, referencing the Supreme Court judgment in State of Karnataka v. All India Manufacturers Organisation.
6. Suppression of Facts and Clean Hands Doctrine:
The court found that the applicant suppressed material facts about previous proceedings before other forums. Citing the Supreme Court decision in Prestige Lights Ltd. v. State Bank of India, the court noted that parties must disclose all relevant facts when seeking equitable relief. The applicant's failure to do so meant they did not come to the court with clean hands, and thus were not entitled to equitable relief.
7. Prima Facie Case and Balance of Convenience for Granting Injunction:
The court assessed whether the applicant had established a prima facie case and whether the balance of convenience favored granting an injunction. Referencing the Supreme Court decision in Dalpat Kumar v. Prahlad Singh, the court stated that the applicant failed to demonstrate a serious disputed question that needed adjudication. The court concluded that the balance of convenience did not favor the applicant, and no irreparable injury would result from denying the injunction.
Conclusion:
The court dismissed the application for interim injunction, noting that the applicant did not establish a prima facie case, failed to disclose material facts, and was barred by the principle of res judicata. The court ordered the applicant to pay costs to the first respondent Bank.
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2009 (8) TMI 1284
Issues Involved:
1. Legality of framing charges u/s 306 read with Section 34 of IPC.
2. Interpretation of "abetment" and "instigation" under IPC.
3. Evaluation of evidence at the stage of framing charges.
Summary:
1. Legality of Framing Charges u/s 306 read with Section 34 of IPC:
This appeal by special leave challenges the High Court's judgment dismissing the appellant's Criminal Revision Petition, which upheld the Additional Sessions Judge's order framing charges against the appellant for the offence u/s 306 read with Section 34 of IPC. The appellant was accused of abetting the suicide of the deceased, who was his business partner, as per FIR No. 329 of 2002.
2. Interpretation of "Abetment" and "Instigation" under IPC:
Section 306 IPC requires the prosecution to establish that a person committed suicide and that such suicide was abetted by the accused. The parameters of "abetment" are defined in Section 107 IPC, which includes instigating any person to do that thing, engaging in a conspiracy, or intentionally aiding the act. The Court referred to Ramesh Kumar v. State of Chhattisgarh, explaining that instigation involves provoking, inciting, or encouraging someone to do an act. The Court emphasized that mere words uttered in anger without intention do not constitute instigation.
3. Evaluation of Evidence at the Stage of Framing Charges:
The Court noted that at the stage of framing charges, the material on record should be evaluated to see if it discloses the existence of all ingredients constituting the alleged offence. The trial court observed that the evidence suggested the deceased was under tremendous pressure due to business transactions with the accused, leading to mental torture and ultimately suicide. The trial court inferred that the appellant had "instigated" the deceased to commit suicide, thus justifying the framing of charges. The High Court's dismissal of the Revision Petition was upheld, noting the limited scope of revisional powers u/s 401 of the Code.
Conclusion:
The Supreme Court dismissed the appeal, affirming that the trial court correctly framed charges against the appellant and the High Court rightly dismissed the Revision Petition. The Court clarified that its observations should not influence the merits of the ongoing trial.
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2009 (8) TMI 1283
Issues involved: Assessment u/s 153A of Income Tax Act for seized goods, ownership of goods booked by assessee, applicability of Section 132(4A) presumption, liability of booking agent.
Assessment u/s 153A of Income Tax Act: The assessee, engaged in railway parcels/luggage booking business, faced proceedings u/s 153A for the assessment year 2004-05 due to cash, silver, and gold jewellery found in booked parcels. The CIT(A) and ITAT ruled in favor of the assessee, noting the 14 parties who admitted booking the goods and claimed ownership, absolving the assessee of liability.
Ownership of booked goods: The ITAT emphasized that the assessee was a mere booking agent for angarias who booked the parcels, with the angarias taking responsibility for conveying the goods. The onus to prove ownership was shifted to the angarias who failed to disclose the real owners, leading to the assessee being cleared of liability as the goods did not belong to him.
Applicability of Section 132(4A) presumption: Section 132(4A) presumption was discussed, highlighting that the assessee successfully rebutted the presumption by providing evidence of the 14 angarias who booked the parcels. The ITAT held that the assessment should have been on the angarias, not the booking agent, as the ownership was claimed by them.
Liability of booking agent: The High Court concluded that the assessee, acting solely as a booking agent, was not responsible for the seized goods and should not be taxed for their value. The court dismissed the appeal, stating that no substantial question of law arose as the assessee had proven the goods did not belong to him.
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2009 (8) TMI 1282
Issues Involved:
1. Default in payment of taxes and water charges.
2. Reasonable and bona fide need of the landlords for their own use and occupation.
3. Challenge to the orders of ejectment.
4. Condition for stay of execution of the decree.
5. Applicability of decisions in Atma Ram Properties and Niyas Ahmad Khan.
6. Definition of "tenant" under the Bombay Rent Act.
7. Reasonableness of provisions in the Bombay Rent Act.
8. Heritability of tenancy and statutory tenant rights.
9. Judicial approach towards landlord-tenant relationship.
Detailed Analysis:
1. Default in Payment of Taxes and Water Charges:
The appellant suffered a decree of ejectment passed by the Court of Small Causes on June 30, 2003, on grounds of default in payment of taxes and water charges as stipulated under Section 13(3)(a) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947.
2. Reasonable and Bona Fide Need of the Landlords:
The decree was also based on the reasonable and bona fide need of the landlords for their own use and occupation in terms of Section 13(1)(g) of the Bombay Rent Act.
3. Challenge to the Orders of Ejectment:
The appellant's appeal against the decree was dismissed by the Division Bench of the Small Causes Court. The appellant then filed a writ petition which the Bombay High Court declined to entertain, suggesting the appellant to file a civil revision application under Section 35F(2) of the Act. The High Court admitted the Civil Revision and stayed the execution of the decree subject to the condition of monthly deposits.
4. Condition for Stay of Execution of the Decree:
The High Court stayed the execution of the decree on the condition that the appellant would deposit Rs. 5,40,000/- every month from the date of the decree. The appellant found this condition onerous, while the respondents maintained that the amount was less than the current market rent.
5. Applicability of Decisions in Atma Ram Properties and Niyas Ahmad Khan:
The Supreme Court found no conflict between the decisions in Atma Ram Properties and Niyas Ahmad Khan. In Atma Ram Properties, the Court upheld the condition imposed by the Tribunal for the tenant to deposit an amount higher than the contractual rent during the pendency of the appeal. In Niyas Ahmad Khan, the Court observed that in writ petitions by landlords against rejection of eviction petitions, there is no scope for interim directions to the tenant to pay higher rent.
6. Definition of "Tenant" under the Bombay Rent Act:
The appellant argued that under the Bombay Rent Act, a tenant suffering a decree of eviction did not lose the status of 'tenant' and continued to enjoy protections under the Act. The Supreme Court, however, found that the appellant could not derive support from the decisions in Damadilal and Gian Devi Anand, which were rendered in a different context.
7. Reasonableness of Provisions in the Bombay Rent Act:
The Court noted that the reasonableness of the provisions of the Maharashtra Rent Control Act, 1999, or the Bombay Rent Act did not arise in this case but acknowledged that the reasonableness might need to be examined in an appropriate case.
8. Heritability of Tenancy and Statutory Tenant Rights:
The Supreme Court discussed the heritability of tenancy and statutory tenant rights, referring to the decisions in Damadilal and Gian Devi Anand. The Court observed that the determination of contractual tenancy did not extinguish the rights of the tenant, and the tenant continued to retain his estate and interests in the demised premises.
9. Judicial Approach Towards Landlord-Tenant Relationship:
The Court emphasized the need for a balanced and objective approach to the relationship between the landlord and tenant, highlighting that the judicial attitude towards this relationship has evolved over time. The Court reaffirmed the views expressed in Satyawati Sharma v. Union of India, advocating for a more balanced approach.
Conclusion:
The Supreme Court held that in an appeal or revision preferred by a tenant against an order or decree of eviction passed under the Rent Act, it is open to the appellate or the revisional Court to stay the execution of the order or decree on terms, including a direction to pay monthly rent at a rate higher than the contractual rent. The Court found the High Court's order just and proper, dismissing the appeal with costs.
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2009 (8) TMI 1281
Issues Involved:
1. Condonation of delay in filing the Tax Appeal.
2. Explanation and sufficiency of cause for the delay.
3. Applicability of liberal approach in condoning delay for government entities.
Summary:
Issue 1: Condonation of delay in filing the Tax Appeal
The application was preferred for condonation of a delay of 1173 days in filing the Tax Appeal against the order dated 17th August 2009 passed by the Gujarat Value Added Tax Tribunal, Ahmedabad. The applicant-State explained that the delay was due to the administrative procedures required to obtain approval from various departments before filing the appeal.
Issue 2: Explanation and sufficiency of cause for the delay
The applicant-State argued that the delay was caused by the procedural requirements of the government, which included obtaining opinions from several officers, getting approval from the Finance Department, and then preparing the appeal papers. The applicant emphasized that the delay was not intentional and that a meritorious case would be prejudiced if the delay was not condoned. However, the court found the explanation to be in general terms and lacking specific details. The court noted that even after receiving approval from the Finance Department on 22nd February 2010, the appeal was filed much later on 31st January 2013, without a satisfactory explanation for this extended delay.
Issue 3: Applicability of liberal approach in condoning delay for government entities
The applicant relied on several judgments, including G. Ramegowda v. Special Land Acquisition Officer and N. Balakrishnan v. M. Krishnamurthy, to argue for a liberal approach in condoning delays involving government entities. The court acknowledged that ordinarily, a justice-oriented approach is adopted rather than giving undue importance to technicalities. However, it emphasized that the substantial law of limitation cannot be disregarded without a justified cause. The court referred to the judgment in Lanka Venkateshwarlu (D) by L.Rs. v. State of A.P. & Ors., which held that liberal and justice-oriented approaches cannot be used to jettison the substantial law of limitation.
The court also cited Balwant Singh [Dead] v. Jagdish Singh & Ors., which reiterated that "sufficient cause" implies the presence of legal and adequate reasons, and the party must show that it acted bona fide and took all possible steps within its power to avoid the delay. In the absence of a plausible and acceptable explanation, as highlighted in Postmaster General & Ors. vs. Living Media India Limited & Anr., the court refused to condone the delay mechanically, even though the applicant was a government entity.
Conclusion:
The court concluded that the explanation provided by the applicant was insufficient and did not justify the inordinate delay of 1173 days. Consequently, the application for condonation of delay was rejected, and the Tax Appeal {Stamp} No. 290/2013 was also dismissed.
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2009 (8) TMI 1280
Issues involved: Alleged non-genuine purchases of color and chemicals, reliance on statement of a third party without confrontation, validity of addition by Assessing Officer.
Summary:
Issue 1: Alleged non-genuine purchases
The Appellate Tribunal ITAT Ahmedabad heard an appeal regarding alleged non-genuine purchases of color and chemicals by the Assessee Company. The Assessing Officer issued notices under section 133(6) to verify the purchases from two parties, Nalanda Corporation and Neha Synthetics, who did not respond. It was revealed that a person named Rohit Panwala was involved in issuing bogus bills for color and chemicals. The Tribunal noted previous decisions where additions based solely on Rohit Panwala's statement were deemed unjustified. Citing lack of concrete evidence, the Tribunal deleted the addition, following the precedent set by similar cases.
Issue 2: Reliance on third party statement
The appeal also challenged the reliance on Rohit Panwala's statement without confrontation. The Tribunal, based on previous rulings, emphasized the need for substantial evidence to support such additions. As the Tribunal consistently held that additions cannot be made solely on the basis of a third party's statement, the addition in this case was deemed unsustainable and subsequently deleted.
Issue 3: Validity of Assessing Officer's addition
The Assessing Officer's addition was contested by the Assessee, highlighting the Tribunal's consistent stance against additions based solely on statements like Rohit Panwala's. Given the lack of concrete evidence supporting the addition, the Tribunal ruled in favor of the Assessee and allowed the appeal.
In conclusion, the Appellate Tribunal ITAT Ahmedabad, in the absence of substantial evidence, deleted the addition made by the Assessing Officer, emphasizing the importance of concrete proof in such cases. The appeal filed by the Assessee was allowed based on the Tribunal's consistent interpretation of the law.
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2009 (8) TMI 1279
Issues involved: Application to direct Official Liquidator to remove seal on property; Ownership of property in liquidation.
Ownership of Property in Liquidation:
The applicant bank sought removal of seals on a property, shop No.228 of Trade Centre, claiming that the property was not owned by the company in liquidation but by Surendra K. Agrawal, who acted as a guarantor in a loan transaction. The bank had filed Lavad Suits for recovery, resulting in awards against the principal debtor and Surendra K. Agrawal. Despite the property being shown as the registered office of the company in liquidation, evidence indicated it belonged to Surendra K. Agrawal, not the company. The absence of company records at the property supported this claim. The Court directed the Official Liquidator to remove the seals, as the property was not an asset of the company in liquidation, ensuring the bank's recovery efforts were not hindered.
Official Liquidator's Report and Property Examination:
Following an interim order, an inventory of the property revealed no materials inside the shop. Subsequent reports by the Official Liquidator confirmed the property was not linked to the company in liquidation, as the directors listed did not include Surendra K. Agrawal. Documents presented by the bank showed that Surendra K. Agrawal, while alive, had deposited title documents of the shop as a guarantor for a loan, further supporting the claim that the property was not owned by the company in liquidation. The Court emphasized that the Official Liquidator should remove the seals after conducting a thorough examination in the presence of bank officials.
Conclusion:
The Court's decision was based on the clear evidence that the property in question belonged to Surendra K. Agrawal, not the company in liquidation. By directing the Official Liquidator to remove the seals, the Court ensured that the bank's recovery efforts were not impeded. It was clarified that the Court's examination focused solely on determining ownership of the property in relation to the company in liquidation, without prejudice to any other parties claiming interests in the property.
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2009 (8) TMI 1278
Issues involved:
The legal issue in this case revolves around the validity of a block assessment order under Section 158BC without the issuance of a notice under Section 143(2).
Summary:
Legal Issue - Validity of Block Assessment Order:
The appeal was filed against the Commissioner's order for the block period 10-6-1993 to 20-7-2003, where the first appellate authority partially allowed the assessee's appeal. The cross-objection raised the issue of the assessment's validity u/s 143(2) without notice. The assessing officer did not issue a notice u/s 143(2) before completing the block assessment u/s 158BC(c) on 31-7-2002. The Tribunal held the assessment order dated 31-7-2002 as bad in law, following the judgment of the Bombay High Court. The Tribunal upheld that non-issuance of notice u/s 143(2) invalidates the assessment under Section 158BC.
Arguments and Decisions:
The assessee's counsel argued that the assessing officer's failure to issue a notice u/s 143(2) before the block assessment renders the assessment invalid. The Tribunal agreed with this argument, citing relevant judgments. The Tribunal dismissed the revenue's appeal and allowed the assessee's cross-objection, holding the order under Section 158BC as bad in law. The Tribunal did not delve into the revenue's grounds as the assessing officer's order was already canceled.
Legal Precedents:
The Tribunal referred to judgments by the Bombay High Court and the Delhi High Court to support the decision that non-issuance of notice u/s 143(2) affects the validity of the assessment under Section 158BC. The Tribunal also discussed the applicability of Section 292BB and its interpretation by the Special Bench of the Tribunal in a related case.
Conclusion:
The Tribunal concluded that the failure to issue a notice u/s 143(2) before the block assessment under Section 158BC renders the assessment invalid. The appeal by the revenue was dismissed, and the cross-objection by the assessee was allowed based on the legal issue raised.
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2009 (8) TMI 1277
Issues Involved:
1. Appointment of an Advocate Commissioner to send disputed cheques for forensic examination.
2. Determination of the age of ink used in the cheques.
3. Legal principles regarding the right to fair trial and adducing rebuttal evidence.
Summary:
1. Appointment of an Advocate Commissioner to send disputed cheques for forensic examination:
The petitioners/defendants filed an application in I.A.No.115 of 2008 seeking the appointment of an Advocate Commissioner to send the disputed cheques to a Forensic Science Expert for examination. The first appellate Court dismissed this application, leading to the current Revision.
2. Determination of the age of ink used in the cheques:
The petitioners argued that the cheques were presented after a long time and fabricated, with the signature in one ink and the writings in another. They sought forensic examination to prove that the cheques were not drawn by the drawer. The respondent/plaintiff contended that the cheques were valid and supported by consideration, and there was no necessity for expert opinion. The lower Court dismissed the petition, noting that determining the age of the ink scientifically is not possible with accuracy.
3. Legal principles regarding the right to fair trial and adducing rebuttal evidence:
The petitioners cited judgments to support their right to a fair trial and the opportunity to disprove the genuineness of the cheques. They referenced the Supreme Court judgment in T.Nagappa Vs. Y.R.Muralidhar, which emphasized the right to adduce rebuttal evidence. The respondent/plaintiff countered with a judgment from this Court (2008 (1) CTC 491) stating that the age of the ink cannot be determined with scientific accuracy. The Court concluded that sending the cheques for forensic examination would not yield scientifically accurate results and upheld the lower Court's decision to dismiss the petition.
Conclusion:
The High Court dismissed the Revision, agreeing with the lower Court that sending the cheques for forensic examination would not provide scientifically accurate results and would not aid in resolving the case. The petitioners' request was deemed unnecessary and the lower Court's decision was upheld.
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2009 (8) TMI 1276
Issues involved:
The appeal concerns the computation of interest under Section 234C of the Income-tax Act, 1961 for the assessment year 1996-97.
Computation of Interest under Section 234C:
The Assessee had income from long-term capital gains in 1995, and the Assessing Officer charged interest under Section 234C. The Assessee contended that the interest was wrongly charged. The dispute revolved around whether advance tax on long-term capital gains should be paid immediately or after the date of sale. The CIT(A) upheld the Assessing Officer's order, stating that the amendment to Section 234C was prospective.
Arguments and Analysis:
The Assessee argued that the amendment was retrospective, citing the Finance (No. 2) Bill 1996 and relevant case law. The revenue contended that the amendment was not retrospective. The Tribunal analyzed the provisions of Section 234C, emphasizing the payment of advance tax in instalments for different types of taxpayers. The Tribunal referred to the Supreme Court's decision in Gold Coin Health Food (P.) Ltd.'s case regarding retrospective application of tax law amendments.
Decision:
The Tribunal found that the amendment to Section 234C was clarificatory and retrospective in nature. The Assessee had paid taxes in accordance with the post-amendment provisions, thus not in default under Section 234C. Consequently, no interest was chargeable under Section 234C, and the appeal by the Assessee was allowed.
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2009 (8) TMI 1275
Issues involved: Reduction of addition of undisclosed income u/s 158BC read with section 158BD.
Summary:
The appeal was filed by the Revenue against the order of the CIT(A) reducing the addition of undisclosed income made by the AO. A search action revealed a bank statement in the name of a sales-tax practitioner, the assessee, with significant credits. The AO added the total credits as undisclosed income. The CIT(A) directed the AO to compute profit at 7% of the deposits, considering the nature of the transactions. The Revenue contended that the CIT(A) erred in law by directing the profit computation at 7%. The Tribunal held that the onus was on the assessee to prove the source of deposits, and only the peak credit in the bank account could be treated as income. The order of the CIT(A) was set aside, and the AO was directed to calculate the peak credit for the addition.
In conclusion, the appeal was partly allowed, and the order was pronounced in open court.
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2009 (8) TMI 1274
Issues involved: Appeal against common order of CIT(A) for assessment years 2003-04 and 2004-05.
Amortisation of investments under 'Head to Maturity' category:
- Assessee challenged disallowance of Rs.3,13,61,004 as amortization of investments.
- Claimed investments under 'Held to Maturity' category represent stock-in-trade, hence amortization is expenditure.
- Referred to Bangalore Tribunal decision in own case for AY 1993-94 where similar claim allowed.
Disallowance under section 14A of the Income-tax Act, 1961:
- Disallowance of Rs.3,22,65,853 as estimated expenditure attributable to exempt income.
- Contended all investments funded by own funds, no specific expenditure for earning income.
Employees' contribution to Provident Fund:
- Disallowance of Rs.6,45,560 for employees' PF contribution.
- Submitted contribution made before due date for filing return, no addition required.
Contingent liability relating to employees compensation expenses:
- Disallowance of Rs.19,32,385 for employee compensation expenses under ESOS.
- Claimed treatment as per SEBI guidelines, not contingent liability but allowable revenue expenditure.
- Cited Madras Tribunal decision supporting allowance as revenue expenditure.
Capital expenditure on purchase of software:
- Disallowance of Rs.4,75,61,599 for software purchase treated as capital expenditure.
- Argued software doesn't provide enduring benefit, should be revenue expenditure.
- Referred to judicial decisions supporting treatment as revenue expenditure.
Loss on acquisition of land:
- Disallowance of Rs.1,05,73,978 for land portion written off.
- Asserted as business loss, allowable revenue expenditure u/s 37 of the Act.
Depreciation on leased assets:
- Disallowance of Rs.45,11,260 as depreciation on leased assets.
- Mentioned valuation report by departmental valuation officers for assessment years 1994-95 to 1997-98.
Deduction under section 80M:
- Reduction of Rs.6,45,800 from deduction claimed under section 80M.
- Contended no actual expenditure incurred for earning dividend income, adjustment unjustified.
- Cited Calcutta High Court decision on allowance of relief under section 80M.
Interest under section 234D:
- Levying of Rs.35,64,327 interest under section 234D of the Act.
Separate Judgement:
- Learned CIT passed order under section 263 disallowing certain claims while appeal was pending before CIT(A).
- CIT(A) directed to pass order on merit except for grounds considered by CIT in revision order under section 263.
- Appeals allowed for statistical purposes.
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2009 (8) TMI 1273
The High Court of Kerala dismissed the revision petition against an order by the Additional Sessions Judge, Kollam regarding the deposit of compensation while ordering suspension of sentence. The court held that the order was purely interlocutory in nature and not subject to revision under Section 397(2) of the Code of Criminal Procedure. The petitioner was advised to move an appropriate application under Section 482 of the Code.
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2009 (8) TMI 1272
Issues Involved:
1. Repayment of investments by CEPL.
2. Utilization of fixed deposits for repayment.
3. Compliance with statutory and legal requirements.
4. Interference in the management of CEPL.
5. Board meetings and decisions.
6. Attachment of VML properties.
7. Implementation of Company Law Board order.
Detailed Analysis:
1. Repayment of Investments by CEPL:
The Company Law Board (CLB) directed CEPL to return Rs. 75 crores and Rs. 4 crores invested by ORE and Athappan respectively, with 8% simple interest per annum from the date of investment till repayment. The repayment was to be completed within 12 months starting November 1, 2008, in installments, with at least 25% of the amount due to be paid every quarter. If CEPL failed to make the repayment within the specified time, the immovable properties of VML would be conveyed to ORE and Athappan as consideration for the reduction of capital and surrender of shares.
2. Utilization of Fixed Deposits for Repayment:
CEPL, C.G. Holdings, and KCP were authorized to use the fixed deposits held by CEPL with SBI, Erode Main Branch, towards refunding the investments of ORE and Athappan. However, SBI expressed its inability to release the fixed deposits due to an order from the Inspector of Police, Central Crime Branch, Chennai, freezing the deposits based on a criminal case. Despite this, KCP attempted to deal with the fixed deposit amounts unilaterally, leading to objections from ORE and Athappan.
3. Compliance with Statutory and Legal Requirements:
ORE, being a non-resident entity under FEMA, required compliance with FEMA regulations for any transfer of funds or securities. The CLB order specified that any transfer of shares or reduction of capital should comply with the relevant laws. Additionally, the properties of VML had been attached by the EPFO for statutory dues, which needed to be addressed.
4. Interference in the Management of CEPL:
KCP and C.G. Holdings sought to manage CEPL without interference from ORE and Athappan. They argued that the nominees of ORE and Athappan were obstructing the day-to-day management of CEPL, making it impossible to generate funds for repayment. They requested an injunction to restrain ORE and Athappan from interfering in CEPL's management.
5. Board Meetings and Decisions:
ORE and Athappan convened a board meeting on October 23, 2008, which KCP did not attend, considering it illegal. Decisions taken in this meeting were challenged by KCP as being contrary to the CLB order. The CLB needed to determine the legality of the board meeting and the decisions taken therein.
6. Attachment of VML Properties:
The properties of VML were attached by the EPFO due to unpaid statutory contributions. The CLB order required KCP and VML to take steps to lift the attachment to facilitate the repayment process.
7. Implementation of Company Law Board Order:
The CLB order aimed to facilitate the smooth exit of ORE and Athappan from CEPL. The parties were given the liberty to approach the CLB for any difficulties in implementing the order. The CLB had to ensure that the order was implemented effectively, protecting the interests of all parties involved.
Operative Directions:
1. SBI was authorized to release 50% of the maturity proceeds of the fixed deposit in favor of ORE and Athappan in the ratio of 75:4 and the remaining 50% in favor of C.G. Holdings and KCP.
2. ORE and Athappan were restrained from exercising their rights as directors of CEPL until further orders.
3. C.G. Holdings and KCP were permitted to induct two additional directors on the board of CEPL and manage its affairs without interference from ORE and Athappan.
4. The properties of VML would be conveyed to ORE or its nominee if CEPL, C.G. Holdings, and KCP failed to comply with the CLB order.
5. ORE and Athappan were required to deposit their share certificates and signed transfer forms with the Bench Officer.
6. If C.G. Holdings and KCP failed to file an affidavit as required, SBI would release the entire maturity proceeds of the fixed deposit in favor of ORE and Athappan.
7. All other terms and conditions of the CLB order dated August 13, 2008, remained unchanged.
The CLB aimed to balance the interests of all parties and ensure compliance with its order while addressing the legal and statutory requirements involved.
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2009 (8) TMI 1271
Issues involved:
The issues involved in the judgment include the legality of withholding registration of Sale Deeds by the District Sub-Registrar, Ranchi, based on the title of the Vendor and the application of the Urban Land Ceiling Act, 1976 to the transferred lands.
Judgment Details:
W.P.(C) No. 2563 of 2003:
- The petitioner sought registration of Sale Deeds for land purchase, which was withheld by the District Sub-Registrar, Ranchi.
- The land's history, transfers, and pending Urban Land Ceiling proceedings were detailed.
- The Counter Affidavit argued that the Vendor had no valid title over the property, making the Sale Deed unregistrable.
- The petitioner's counsel cited previous court decisions emphasizing the duty of the registering authority to register documents meeting statutory requirements without questioning the Vendor's title.
- The judgment held that the District Sub Registrar lacked jurisdiction to withhold registration based on title issues and directed registration of the Sale Deeds.
W.P.(C) No. 3262 of 2003:
- Similar to the first case, the petitioners sought registration of Sale Deeds for land purchase, facing withholding by the District Sub-Registrar, Ranchi.
- The land's history of transfers and pending Urban Land Ceiling Act proceedings were outlined.
- The Counter Affidavit contended that the Vendor lacked the power to transfer the land, justifying the withholding of registration.
- The judgment referenced previous court decisions emphasizing the registering authority's obligation to register documents meeting statutory requirements.
- It concluded that the District Sub Registrar had no jurisdiction to refuse registration and directed immediate registration of the Sale Deeds.
Conclusion:
The judgment in both cases emphasized the duty of the registering authority to register documents meeting statutory requirements without delving into the title issues of the Vendor. It directed the District Sub-Registrar, Ranchi, to register the Sale Deeds promptly, highlighting the importance of adherence to legal procedures in registration matters.
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2009 (8) TMI 1270
Issues Involved:
1. Applicability of the doctrine of "equal pay for equal work."
2. Mode and manner of selection as a ground of classification.
3. Grant of pay to daily wagers on the basis of the minimum of a pay scale.
4. Judicial discipline and adherence to precedent.
5. Practical application of the doctrine of "equal pay for equal work" in different fact situations.
Detailed Analysis:
1. Applicability of the Doctrine of "Equal Pay for Equal Work":
The primary issue in these appeals is the applicability of the doctrine of "equal pay for equal work." The respondents, appointed as daily wagers by the Public Health Department of Punjab without following the recruitment process, claimed the benefit of equal pay for equal work after serving for a number of years. The High Court allowed their writ petitions, granting them the minimum of the pay scale with dearness allowance, but denied their prayer for interest.
2. Mode and Manner of Selection as a Ground of Classification:
The appellants contended that the High Court erred by not considering that the principle of "equal pay for equal work" should not be applied automatically. The court must look at the nature, quality, and quantity of work, as well as the mode and manner of selection. It was argued that there must be complete and wholesale identity between the groups claiming equal pay and those already receiving it. The Supreme Court reiterated that the mode of selection can be a relevant factor for classification, as seen in the cases of S.C. Chandra v. State of Jharkhand and State of Haryana v. Charanjit Singh.
3. Grant of Pay to Daily Wagers on the Basis of the Minimum of a Pay Scale:
The respondents argued that, having worked for a long time, they should be granted pay on the basis of the minimum of a pay scale, similar to their counterparts in other departments. The Supreme Court noted that while the principle of "equal pay for equal work" is recognized under Article 39(d) of the Constitution, its application requires a thorough examination of various factors, including the method of recruitment, qualifications, and responsibilities. The Court emphasized that the principle is not an abstract one and must be applied with caution.
4. Judicial Discipline and Adherence to Precedent:
The Supreme Court stressed the importance of judicial discipline and adherence to precedent. It observed that different Benches of the High Courts and even the Supreme Court have sometimes bypassed the ratio of larger Benches. The Court reiterated that the rule of judicial discipline is essential for sustaining the legal system. In this context, the Court referred to the case of Official Liquidator v. Dayanand, which emphasized the need for adherence to the principles laid down by larger Benches.
5. Practical Application of the Doctrine of "Equal Pay for Equal Work" in Different Fact Situations:
The Supreme Court highlighted that the application of the doctrine of "equal pay for equal work" must consider various dimensions of a given job, including responsibilities, qualifications, and the nature of duties. It noted that the principle has been applied differently in various cases, depending on the specific facts and circumstances. The Court referred to the case of State of Haryana v. Jasmer Singh, which held that the quality of work, educational qualifications, and other relevant factors must be evaluated by expert bodies rather than being determined by the courts.
Conclusion:
The Supreme Court concluded that the High Court mechanically applied the doctrine of "equal pay for equal work" without examining relevant factors. It directed the State to appoint an Expert Committee to examine whether the respondents satisfy the criteria for invoking the principle, including adherence to recruitment rules. The Court emphasized that equality under Article 14 should be invoked only where parties are similarly situated and where orders passed in their favor are legal. The appeals were allowed, except for the one dismissed as infructuous, with costs payable by the State in one case.
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2009 (8) TMI 1269
Issues Involved:
1. Allegations of corrupt practices by the appellant.
2. Compliance with Section 83(1) of the Representation of the People Act, 1951.
3. Material facts and particulars in the election petition.
4. Impact of non-compliance with procedural requirements on the maintainability of the election petition.
Detailed Analysis:
1. Allegations of Corrupt Practices by the Appellant:
The respondent alleged that the appellant indulged in corrupt practices by constructing 13 bore wells and providing ambulances to lure voters. The appellant refuted these allegations, arguing that the election petition lacked material facts and did not comply with Section 83(1) of the Representation of the People Act, 1951. The appellant contended that the allegations were vague and did not demonstrate how the voters were influenced to vote in his favor.
2. Compliance with Section 83(1) of the Representation of the People Act, 1951:
Section 83(1) requires an election petition to contain a concise statement of material facts and full particulars of any corrupt practice alleged. The appellant argued that the election petition did not meet these requirements, as it lacked specific details about the alleged corrupt practices, such as the names of the parties involved, the dates and places of the alleged acts, and how these acts influenced the election outcome.
3. Material Facts and Particulars in the Election Petition:
The Court emphasized the importance of material facts in an election petition. It referred to several precedents, including Azhar Hussain v. Rajiv Gandhi, which established that the absence of material facts leads to an incomplete cause of action. The Court noted that the respondent failed to provide essential details, such as whether the bore wells were operational, the specific voters influenced, and the deployment details of the ambulances. The Court concluded that the petition lacked the necessary material facts to substantiate the allegations of corrupt practices.
4. Impact of Non-Compliance with Procedural Requirements on the Maintainability of the Election Petition:
The Court reiterated that non-compliance with Section 83(1) is fatal to the maintainability of an election petition. It highlighted that the failure to provide a concise statement of material facts and particulars renders the petition liable to be dismissed. The Court found that the High Court had erred in not dismissing the petition at the preliminary stage, as it did not disclose a cause of action due to the lack of material facts.
Conclusion:
The Supreme Court allowed the appeal, concluding that the election petition lacked material facts and did not comply with Section 83(1) of the Representation of the People Act, 1951. Consequently, the election petition was dismissed, and the parties were directed to bear their own costs.
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2009 (8) TMI 1268
Issues Involved:
1. Cancellation of pre-arrest bail granted by the Sessions Judge.
2. Legality of granting pre-arrest bail for an indefinite period.
Summary:
Issue 1: Cancellation of Pre-Arrest Bail
- The petitioner, the mother of the victim girl, filed a Criminal Misc. Application u/s 439(2) of the CrPC, seeking cancellation of the pre-arrest bail granted to the respondent No. 1-accused by the Sessions Judge, Goalpara.
- The petitioner lodged an Ejahar on 06.01.2008, alleging that her minor daughter was kidnapped by the respondent No. 1-accused, who also took cash and gold ornaments.
- The Sessions Judge granted pre-arrest bail to the respondent No. 1-accused on 02.01.2009, which the petitioner sought to cancel.
Issue 2: Legality of Granting Pre-Arrest Bail for an Indefinite Period
- The court discussed the power u/s 439(2) CrPC for cancellation of bail and emphasized that the parameters for granting and canceling bail are different.
- The court highlighted that the bail should be granted based on the nature of the accusation, severity of punishment, and reasonable apprehension of tampering with evidence.
- The court cited several Apex Court judgments, including Gurcharan Singh vs. State (Delhi Administration), which clarified the special powers of the High Court or Court of Sessions regarding bail.
- The court noted that the Sessions Judge's order granting pre-arrest bail for an indefinite period was ex facie illegal, as anticipatory bail should be of limited duration.
- The court referred to the Apex Court's decisions in Salauddin Abdulsamad Shaikh vs. State of Maharashtra and K.L. Verma vs. State and Anr., which held that anticipatory bail must be of limited duration and the regular court should deal with the bail application after the investigation progresses.
- The court concluded that the impugned order dated 02.01.2009 was in absolute infraction of the Apex Court's ratio and set aside the order to the extent of granting pre-arrest bail for an indefinite period.
- The respondent No. 1-accused was directed to approach the concerned court for regular bail within one month, and the concerned court was instructed to dispose of the bail application within 15 days of receipt.
Conclusion:
- The impugned order dated 02.01.2009 granting pre-arrest bail for an indefinite period was quashed.
- The respondent No. 1-accused was directed to assist the investigation and apply for regular bail within the stipulated time.
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2009 (8) TMI 1267
Issues involved: Taxability of income earned by the society and its members as long term capital gains.
Summary:
1. The appeal was filed by the assessee-society against the Order passed by the CIT (A)-XIX, Mumbai regarding the taxability of income earned by the society and its members as long term capital gains for the assessment year 1999-2000.
2. The assessee-society, a registered Cooperative Housing Society, was approached by a developer to construct additional floors on the existing building in exchange for a lump sum amount. The Assessing Officer considered this as a transfer of right and brought the entire consideration received to tax as long term capital gains.
3. The CIT (A) affirmed the Assessing Officer's decision and enhanced the assessment to bring the total consideration of Rs. 92 lakhs to tax. The society contended that no right was transferred, and the amount received was not taxable as capital gains.
4. The society argued that no right was available to construct additional floors, and the amount received was in exchange for permission granted to the developer without any cost of acquisition. Citing relevant case laws, the society contended that the amount received should not be taxed as capital gains.
5. After hearing both parties, the Tribunal found that no existing right was transferred to the developer, and no cost was incurred prior to granting permission. Therefore, the amount received by the society and its members was not assessable as long term capital gains. The appeal filed by the assessee was allowed.
Judges: D. Manmohan, Vice President and R.K. Panda, Accountant Member
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