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2013 (8) TMI 1178
Issues involved:
1. Whether retention of 49 percent saleable area by the developer represents transfer of stock in trade u/s 45(2) of the Income Tax Act, 1961?
2. Whether eligibility of the assessee to receive 51 percent of the saleable area from the developer represents consideration towards transfer of stock in trade?
3. Whether relevant facts regarding the retention of saleable area by the developer and the share entitled to the assessee were not considered by the Tribunal?
4. Whether the development agreement between the assessee and the developers determines the consideration towards transfer of stock in trade?
Summary:
The Respondent-Assessee appealed against the order passed by the Principal Commissioner of Income Tax-12, Mumbai under Section 263 of the Income Tax Act, 1961, revising the Assessment Order for Assessment Year 2011-12. The Assessee, engaged in various businesses, had its total income determined at Rs. 3.29 crores for 2011-12, which was revised by the Principal CIT under Section 263 as erroneous and prejudicial to the revenue.
The ITAT held that the Principal CIT lacked jurisdiction to invoke revision under Section 263 as the Assessing Officer's view was a possible one and not unsustainable in law. Citing precedents like Grasim Industries Ltd. v/s. CIT and Gabriel India Ltd., the ITAT found that the Principal CIT failed to demonstrate that the Assessment Order was erroneous and prejudicial to revenue. As the ITAT's finding on lack of jurisdiction was unchallenged, no substantial questions of law arose, leading to the dismissal of the appeal with no costs awarded.
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2013 (8) TMI 1177
Issues involved: Prosecution without sanction u/s 197 of CrPC, legality of filing chargesheet after retirement, withdrawal of prosecution sanction, competence of authority granting sanction.
The appellant, a public servant, was prosecuted u/s 13(1)(a) and 13(2) of Prevention of Corruption Act, 1988. He contended that prosecution without sanction u/s 197 of CrPC was illegal as the State Government had not granted sanction for filing the criminal case against him. The State argued that filing the challan against the appellant post-retirement was not illegal. The application for discharge was dismissed based on the State's stance (para 3).
The appellant, relying on a precedent, argued that if sanction is refused while in service, prosecution post-retirement is impermissible. The respondent conceded that the appellant's case fell under the cited precedent and acknowledged that the appellant's retirement rendered prosecution untenable. The Court, in line with the precedent, held in favor of the appellant, quashing the orders against him (para 6).
In another case, the petitioner challenged proceedings u/s 13(1)(d) and 13(2) of Prevention of Corruption Act, 1988, citing lack of sanction for the accused controlling officers. The petitioner claimed that the earlier sanction was withdrawn based on subsequent resolutions. The Court noted the absence of provisions for withdrawal of sanction once granted and questioned the competence of the authority granting sanction. The petitioner was granted time to submit additional documents, and the matter was adjourned (para 9).
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2013 (8) TMI 1176
Issues involved:
1. Special leave petitions against the order of the Madhya Pradesh High Court granting transit bail.
2. Surrender of Respondent No. 1 rendering the special leave petitions infructuous.
3. Concerns raised by the learned counsel for Respondent No. 1 regarding potential prejudice due to court observations.
4. Clarification by the Supreme Court regarding the impact of its observations on the bail claims of Respondent No. 1 and other accused.
5. Disposal of special leave petitions and criminal miscellaneous petitions.
6. Listing of a writ petition after two weeks.
The Supreme Court heard special leave petitions (SLP) challenging the Madhya Pradesh High Court's order granting transit bail to Respondent No. 1 for 60 days. Following the Respondent's surrender as per the Supreme Court's directive, the SLPs were deemed infructuous. The Respondent's counsel expressed concerns about potential prejudice arising from the Court's observations on bail matters. The High Court's order pertained to transit bail, while the Supreme Court's observations were on anticipatory bail, clarifying that they would not impact the Respondent's claims for temporary or regular bail before the Trial Court or High Court.
The Supreme Court further clarified that its observations would not prejudice the claims of any other accused seeking anticipatory or regular bail in the case before the High Court or any appropriate Court. Consequently, the special leave petitions and criminal miscellaneous petitions were disposed of. Additionally, a writ petition was scheduled for listing after a two-week period.
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2013 (8) TMI 1175
Issues Involved:
1. Quashing of proceedings u/s 482 of CrPC.
2. Allegations of cheating, criminal breach of trust, and conspiracy.
3. Delay in filing the complaint.
4. Jurisdiction of the learned Metropolitan Magistrate, Calcutta.
5. Vicarious liability of the petitioner.
Summary of Judgment:
1. Quashing of Proceedings u/s 482 of CrPC:
The petitioner sought quashing of proceedings in complaint case No. C-26935/2011 pending before the Metropolitan Magistrate, 8th Court, Calcutta, u/s 482 of CrPC. The court observed that the continuation of the proceedings would be an abuse of process as the petitioner was not associated with the company during the alleged period (1992-94) and joined as a non-executive Director only in 2005. The allegations did not establish any specific role of the petitioner in the alleged offences.
2. Allegations of Cheating, Criminal Breach of Trust, and Conspiracy:
The complaint alleged that the company and its directors, including the petitioner, committed offences u/s 418/420/406/120B IPC by misrepresenting and selling plots of land without development. The court noted that the petitioner was not connected with the company during the initial transaction period and that the complaint lacked specific averments of the petitioner's role in the alleged cheating or conspiracy. The court emphasized that the concept of vicarious liability is unknown to criminal law, and mere association with the company at a later date does not establish criminal liability.
3. Delay in Filing the Complaint:
The court highlighted the inordinate delay of 17 years in filing the complaint, with no explanation provided by the complainant. The alleged incident occurred in 1994, and the complaint was filed in 2011. The court referenced the Supreme Court's stance that significant delays without justification can lead to the dismissal of complaints.
4. Jurisdiction of the Learned Metropolitan Magistrate, Calcutta:
The petitioner argued that the Metropolitan Magistrate, Calcutta, lacked jurisdiction as the transactions and alleged offences occurred in Hyderabad. The court noted that the complaint did not allege that the brochures or money transactions took place within the jurisdiction of the Calcutta court. It was concluded that the proper jurisdiction would be where the sale deed was executed or the money was received.
5. Vicarious Liability of the Petitioner:
The court reiterated that vicarious liability does not apply to criminal offences under IPC unless explicitly provided by statute. The petitioner's role as a non-executive Director from 2005 did not make him liable for acts committed by the company or other directors in 1992-94. The court found that the complaint was an attempt to exert undue pressure and harass the petitioner.
Conclusion:
The court quashed the proceedings against the petitioner in complaint case No. C-26935/2011 and related revisions, stating that the continuation of such proceedings would be an abuse of process. The court emphasized the lack of specific allegations against the petitioner and the improper application of vicarious liability in this case.
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2013 (8) TMI 1174
Issues Involved:
1. Maintainability of the special leave petition by a third party/stranger in a criminal prosecution.
2. Interpretation of the Juvenile Justice (Care and Protection of Children) Act, 2000, particularly Sections 2(l), 2(k), 2(p), and 28.
3. The applicability of the JJ Act to juveniles committing heinous crimes.
4. Incorporation of international concepts of age of criminal responsibility.
5. Reading down the JJ Act in consonance with Fundamental Rights under Articles 14 and 21 of the Constitution of India.
Summary:
Issue 1: Maintainability of the Special Leave Petition by a Third Party/Stranger
The Court examined whether the adjudication sought by the Petitioner should be refused based on the principle that a third party/stranger does not have the right to participate in a criminal prosecution, which is primarily the function of the State. The Respondents argued that the administration of criminal justice does not envisage any role for a third party/stranger, citing several decisions of the Court. However, the Petitioners contended that their prayers were in the larger public interest and did not seek impleadment in the proceedings against the first Respondent. The Court concluded that the special leave petition does not suffer from the vice of absence of locus on the part of the Petitioners and is maintainable.
Issue 2: Interpretation of the Juvenile Justice (Care and Protection of Children) Act, 2000
The Petitioners sought an authoritative interpretation of Sections 2(l) and 2(k) of the JJ Act, arguing that the criterion of 18 years should not apply to cases of grave offences, particularly heinous crimes against women. They also sought categorization of offences under Section 2(p) based on the grievousness of the crime and the threat to public safety and order. The Court noted that the interpretation sought by the Petitioners would have implications beyond the case of the first Respondent and would affect all juveniles who may come into conflict with the law.
Issue 3: Applicability of the JJ Act to Juveniles Committing Heinous Crimes
The Petitioners argued that Section 28 of the JJ Act should be interpreted to exclude serious offences with a minimum punishment of 7 years imprisonment from its purview, and such offences should be tried by an Ordinary Criminal Court. The Court acknowledged that the adjudication sought by the Petitioners would have far-reaching consequences on an indeterminate number of persons not presently before the Court.
Issue 4: Incorporation of International Concepts of Age of Criminal Responsibility
The Petitioners sought the incorporation of the international concept of age of criminal responsibility and the dilution of the blanket immunity provided to juvenile offenders based on age. The Court did not specifically address this issue in the judgment but indicated that the interpretation of the JJ Act would have broader implications.
Issue 5: Reading Down the JJ Act in Consonance with Fundamental Rights
The Petitioners argued that the JJ Act should be read down in consonance with the rights of victims as protected by Fundamental Rights under Articles 14 and 21 of the Constitution of India. The Court decided to hear the special leave petition on merits and attempt to provide an answer to the several questions raised by the Petitioners.
Conclusion:
The Supreme Court issued notice in the special leave petition and permitted the Respondents to bring additional pleadings on record. The Court clarified that the Board could proceed further in the matter against the first Respondent and render orders in accordance with law.
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2013 (8) TMI 1173
Issues involved: Disallowance of provision for leave encashment, disallowance of loss on unmatured foreign exchange contracts, tax rate discrimination for foreign companies.
Provision for Leave Encashment: The AO disallowed the provision for leave encashment as a contingent liability, citing legal precedents. The CIT(A) upheld the decision, but the Tribunal referred to the Supreme Court judgment in Bharat Earth Movers Ltd. and allowed the claim, stating that the provision made on the basis of entitlement earned by the employee is allowable.
Loss on Unmatured Foreign Exchange Contracts: The assessee did not press this ground during the hearing, leading to its dismissal as not pressed.
Tax Rate Discrimination: The assessee argued that the higher tax rate for foreign companies was discriminatory. The Tribunal, citing the case of M/s BNP Paribas, held that the higher tax rate for foreign companies did not violate the non-discrimination clause due to the Explanation in Section 90 of the IT Act and the judgment in ACIT Vs. J.K. Synthetics. Consequently, the ground raised by the assessee was dismissed, and the appeal was partly allowed.
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2013 (8) TMI 1172
Issues involved: Revenue's appeal against CIT(A)'s order for assessment years 2008-09 and 2009-10 regarding disallowance u/s 40A(2)(b) of the Act.
For AY 2008-09:
The assessee, engaged in trading, filed return declaring income. AO framed assessment u/s 143(3) determining higher income. CIT(A) granted partial relief. Revenue appealed against the deletion of Rs.40,00,000 disallowance u/s 40A(2)(b) on commission payment to brother of the assessee.
AO found commission payment to brother excessive, not backed by evidence. CIT(A) deleted the addition, considering it legitimate business expense based on services rendered by the brother. Revenue contended AO's detailed verification justified the disallowance, supported by the maximum tax rate of both parties. CIT(A)'s decision was upheld based on the professional capabilities of the brother and the increase in turnover.
For AY 2009-10:
Similar facts as AY 2008-09, with the AO disallowing a portion of commission payment as excessive. Both parties agreed on the similarity of facts. The Tribunal restricted the disallowance to a lower amount based on the findings for AY 2008-09.
In conclusion, the Tribunal partly allowed both appeals of the Revenue by restricting the disallowance amounts for both assessment years.
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2013 (8) TMI 1171
Issues involved:
The issues involved in this case are the deletion of addition of Rs. 5,18,220/- made by the AO on account of bogus capital gain and the deletion of addition of Rs. 6,09,000/- made by the AO on account of unaccounted money paid for the purchase of immovable property.
Deletion of addition of Rs. 5,18,220/- on account of bogus capital gain:
The appellants had purchased shares of a company and made a long term capital gain upon selling them. The AO held a portion of this gain as bogus capital gain in a subsequent assessment. However, the Ld. CIT(A) deleted this addition. The ITAT referred to a similar case and set aside the matter to the file of the assessing officer for further examination and directed to allow cross-examination of witnesses by the assessee.
Deletion of addition of Rs. 6,09,000/- on account of unaccounted money for property purchase:
The AO made an addition on account of unaccounted money paid for the purchase of immovable property. However, the Ld. CIT(A) deleted this addition based on lack of evidence and the onus being on the department to prove undisclosed investment. The ITAT upheld this decision, citing the lack of evidence to support the addition. The tribunal followed the doctrine of stare decisis and upheld the decision of the Ld. CIT(A) in this case.
In conclusion, the ITAT partially allowed the appeal for statistical purposes, upholding the deletion of the additions made by the AO in both the cases discussed above.
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2013 (8) TMI 1170
Issues involved: Appeal against the Commissioner of Income Tax (Appeals) order regarding reopening of assessment and depreciation claim on bridges for assessment year 2002-03.
Reopening of Assessment:
The assessee, a construction company, filed a return of income for the assessment year admitting loss and book profit under section 115JB. The assessment was reopened by the Assessing Officer under section 147 disallowing the claim of depreciation on bridges. The ld. CIT(Appeals) upheld the validity of the reopening of assessment, citing the decision in ACIT v. Rajesh Jhaveri Stock Brokers. The Tribunal dismissed the appeal, stating that the Assessing Officer had applied his mind during the initial processing under section 143(1) and upheld the disallowance of depreciation.
Depreciation on Bridges:
Regarding the claim of depreciation on bridges, the ld. CIT(Appeals) directed the Assessing Officer to allow depreciation at 10% on roads and bridges based on previous decisions. The Tribunal noted that the issue was previously considered in the assessee's own case for the assessment year 2003-04, where it was held that the company is entitled to depreciation at 10% on roads, similar to buildings, not at the rates applicable to plant and machinery. The Tribunal dismissed the Revenue's appeal against allowing depreciation on project assets at the rate of 10%, stating that the assessee is entitled to such depreciation based on previous Tribunal decisions.
Judicial Precedents and Conclusion:
The ld. Counsel for the assessee cited various case laws supporting the classification of certain structures as plant for depreciation purposes. The Tribunal found that the issue was already considered in the assessee's previous case and dismissed the appeals of both the assessee and Revenue, as the matter was covered by the Tribunal's earlier decision. The Tribunal noted that the assessee had appealed to the High Court, but without any new orders, the previous decision was upheld.
In conclusion, the appeals filed by both the assessee and Revenue were dismissed by the Tribunal based on previous decisions and lack of new evidence to warrant a different outcome.
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2013 (8) TMI 1169
Issues Involved:
1. Violation of fundamental rights u/Article 14, 21, and 22 of the Constitution of India.
2. Non-adherence to statutory guidelines before arrest.
3. Mental and physical harassment leading to compensation claim.
4. Legality of the arrest and procedural compliance.
Summary:
1. Violation of Fundamental Rights:
The petitioner filed a writ petition u/Article 226 of the Constitution of India, alleging violation of fundamental rights u/Article 14, 21, and 22 due to non-adherence to statutory guidelines before arrest, causing immense mental and physical harassment, and seeking compensation of Rs. 20 lacs.
2. Non-Adherence to Statutory Guidelines:
The petitioner argued that despite a direction for seven days' pre-arrest notice, respondents visited his parents' house on 17th June 2010 without any arrest or search warrant, allegedly to harass and extort money. The respondents claimed they visited Pune to serve the pre-arrest notice, which could have been sent by registered post. The daily diary entry did not mention serving the pre-arrest notice but stated the purpose as investigation.
3. Mental and Physical Harassment Leading to Compensation Claim:
The petitioner claimed that the illegal raid on 17th June 2010 forced his father, a heart patient, to travel from Bangalore to Pune, resulting in mental trauma and a subsequent heart attack leading to his death on 1st July 2010. A private complaint was filed before the JMFC, Pune, leading to an investigation u/s 202 Cr.P.C. and issuance of processes against the respondents. The Bombay High Court quashed the issuance of process, and an SLP is pending before the Supreme Court.
4. Legality of the Arrest and Procedural Compliance:
The petitioner alleged illegal arrest on 4th June 2011, in violation of the Court order for seven days' pre-arrest notice. The respondents claimed the arrest was lawful, with approval from ACP and compliance with procedural requirements. The petitioner disputed the arrest memo and claimed non-disclosure of arrest grounds and detention place. The court found these to be disputed facts requiring evidence, not suitable for determination in a writ petition.
Conclusion:
The court dismissed the writ petition, stating that the petitioner raised disputed questions of facts not amenable to writ jurisdiction u/Article 226. The petitioner was advised to seek appropriate remedy under the law.
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2013 (8) TMI 1168
Issues involved: Appeal against common order of CIT (Appeals) regarding disallowance of expenses u/s 153A r.w.s. 143(3) for multiple assessment years.
Summary:
The Revenue's appeals were directed against a common order of the Commissioner of Income Tax (Appeals) I, Chennai relevant to the assessment years 2001-02, 02-03, 03-04, 04-05, 05-06, and 07-08. The Assessing Officer had observed that the assessee, a producer of feature films and Secretary of the Youth wing of DMDK, had debited expenses in the income and expenditure account without producing supporting evidence. An estimated disallowance of 5% of expenditure was made for each of the mentioned assessment years. The assessee appealed before the CIT(Appeals) and submitted vouchers, contending that the disallowance was on the higher side. The CIT(Appeals) found that some vouchers were self-vouched and reduced the disallowance to 2.5% of expenditure for those vouchers.
The Revenue, aggrieved by the CIT(Appeals) order, preferred an appeal before the Tribunal. The Revenue argued that the assessee failed to furnish evidence before the Assessing Officer, justifying the 5% disallowance. Despite no representation from the assessee, the Tribunal considered the submissions made before the CIT(Appeals) and upheld the decision to reduce the disallowance to 2.5% based on the self-vouched vouchers. The Tribunal found no reason to interfere with the CIT(Appeals) order and dismissed the Revenue's grounds for all the mentioned assessment years.
In conclusion, all the appeals filed by the Revenue were dismissed by the Tribunal, upholding the CIT(Appeals) order.
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2013 (8) TMI 1167
Issues Involved:
1. Decree of possession based on admissions u/r 12 Rule 6 CPC.
2. Validity of notice u/s 106 of the Transfer of Property Act.
3. Defendants' preliminary objections and claims of renovation expenses.
Summary:
1. Decree of possession based on admissions u/r 12 Rule 6 CPC:
The plaintiffs sought a decree of possession for the ground floor of A-27, Nizamuddin West, New Delhi, based on admissions made by the defendants in their written statement. The defendants admitted the landlord-tenant relationship and the rent amount, which was increased over time from Rs. 40,000/- to Rs. 1,35,000/-. The court noted that the defendants did not deny the relationship or the rent paid, and thus, the plaintiffs were entitled to a decree of possession based on these admissions.
2. Validity of notice u/s 106 of the Transfer of Property Act:
The plaintiffs terminated the tenancy via a notice dated 14th December 2011. The defendants contended that the notice was defective but failed to explain how it was defective. The court held that the notice was valid and that the defendants were liable to vacate the premises as the tenancy was terminated by the notice.
3. Defendants' preliminary objections and claims of renovation expenses:
The defendants raised preliminary objections, claiming they spent Rs. 5,00,000/- on renovations and that there was an oral agreement for a 10-year lease extension. However, no counterclaim was filed, and no fresh lease deed was executed after the initial lease expired on 31st January 2002. The court found these objections irrelevant to the plaintiffs' entitlement to possession.
Conclusion:
The court passed a preliminary decree in favor of the plaintiffs, directing the defendants to vacate the premises and hand over peaceful possession of the ground floor of A-27, Nizamuddin West, New Delhi. The application was disposed of accordingly.
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2013 (8) TMI 1166
Issues involved: The appeal concerns the eligibility of the assessee for claiming the benefit of Section 11 of the Income-tax Act, 1961.
Summary:
1. The Revenue contested the CIT(Appeals) decision allowing the assessee's claim for exemption under Section 11 of the Act, based on the assessee's investment in M/s SPK MAC Charitable Trust.
2. The Assessing Officer raised concerns regarding the nature of the investment made by the assessee, alleging a violation of the investment modes specified under Section 11(5) of the Act.
3. The assessee argued that the loan given to M/s SPK MAC Charitable Trust, a registered organization, was in line with the educational objectives shared by both entities and did not breach the investment modes outlined in the Act.
4. The CIT(Appeals) upheld the assessee's contention, ruling that the interest-free loan to the registered Trust did not contravene the provisions of Sections 11 and 12 of the Act.
5. The Revenue challenged the CIT(Appeals) decision, asserting that the transaction with M/s SPK MAC Charitable Trust fell under the purview of a "concern" and was subject to Section 13(1)(c) of the Act.
6. The assessee's counsel relied on legal precedents to support the argument that the loan extended to the charitable Trust was not a donation but a permissible transaction under the Act.
7. The Tribunal, after reviewing the submissions and relevant case law, concluded that the loan provided to M/s SPK MAC Charitable Trust aligned with the educational objectives of both entities and did not violate the provisions of the Act.
8. Consequently, the appeal by the Revenue was dismissed, affirming the CIT(Appeals) decision to grant the assessee exemption under Sections 11 and 12 of the Act.
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2013 (8) TMI 1165
Issues Involved:
The judgment involves appeals filed by the assessee and the Revenue against the orders of the Commissioner of Income Tax (Appeals)-II, Coimbatore for the assessment years 2008-09 and 2009-10 respectively. The primary issues revolve around the classification of expenditure incurred towards modernization and replacement of machinery as either revenue or capital expenditure.
ITA No. 618/Mds/2013 (Assessee's Appeal - Assessment Year 2008-09):
The sole issue in this appeal is whether the expenditure on carding and chute feed machines should be treated as revenue or capital expenditure. The Commissioner of Income Tax (Appeals) sustained the disallowance of this expenditure as capital expenditure, citing the decision of the Hon'ble Supreme Court in CIT Vs. Mangayarkarasi Mills P. Ltd. The assessee contended that the expenditure is revenue in nature. The Tribunal upheld the Commissioner's decision, stating that the expenditure resulted in enduring benefit to the company, thus classifying it as capital expenditure.
ITA No.603/Mds/2013 (Revenue's Appeal - Assessment Year 2009-10):
The issue in this appeal pertains to the deduction claimed for the expenditure on modernization expenses for a compact drafting system. The Revenue contended that this expenditure should be treated as revenue expenditure under section 37 of the Act. The Commissioner of Income Tax (Appeals) allowed the claim of the assessee, following the decision of the Tribunal in the assessee's own case for the assessment year 2007-08. The Tribunal, in line with the earlier decision, dismissed the Revenue's appeal, holding the expenditure as revenue in nature.
In both appeals, the Tribunal considered the nature of the expenditure, the enduring benefit derived from it, and relevant legal precedents to determine whether the expenses should be classified as revenue or capital expenditure. The decisions were based on the specific facts of each case and the applicable legal principles.
Separate Judgement:
The judgment was delivered by Shri Challa Nagendra Prasad, Judicial Member, and Shri Abraham P. George, Accountant Member.
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2013 (8) TMI 1164
Issues involved:
1. Whether the tribunal was justified in summarily disposing the application for condonation of delay and the appeal?
2. Whether service by affixation of notice would amount to a valid service under the Gujarat Sales Tax Act, 1969?
Issue 1:
The appellant challenged the impugned judgment and order passed by the Gujarat Value Added Tax Tribunal, which dismissed the appeal confirming the order passed by the Deputy Commissioner of Commercial Tax. The appellant sought condonation of delay due to various reasons, including the closure of the business, the proprietor settling in the USA, and lack of awareness about the assessment proceedings. The first appellate authority dismissed the application for condonation of delay, leading to the appeal before the tribunal. The appellant argued that there was no deliberate delay and requested the tribunal to consider the appeal on merits. The tribunal dismissed the appeal, prompting the appellant to file the present Tax Appeal raising questions of law.
Issue 2:
The appellant contended that the notice affixed at the factory premises, due to the proprietor's absence, did not constitute valid service. The appellant's advocate argued that the factory had been closed since 1994, taken over by GIDC in 1997, and the proprietor had settled in the USA since 1995. The appellant maintained that the tribunal erred in considering the affixed notice as valid service. The respondent, opposing the appeal, highlighted the significant delay in filing the appeal and argued that the proprietor should have been aware of the proceedings during visits to India. The respondent supported the tribunal's decision to dismiss the appeal based on the delay.
Judgment:
The High Court observed that the delay of approximately ten years in filing the appeal was due to circumstances such as the closure of the factory, the proprietor settling in the USA, and the possession being taken over by GIDC. The Court found no mala fide intention in the delay and deemed it necessary to condone the delay by imposing a reasonable cost. It held that the tribunal erred in not exercising discretion judiciously and allowed the Tax Appeal. The impugned orders were quashed, and the first appellate authority was directed to entertain the appeal on the condition that the appellant pays a cost of Rs.10,000 within three weeks. The Court emphasized that the cost was for condonation of delay and instructed the first appellate authority to decide the appeal on its merits. All contentions were kept open for consideration, and the Tax Appeal was allowed accordingly.
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2013 (8) TMI 1163
Issues involved: Interpretation of Reserve Bank Master Circular on willful defaulters by a nationalized bank.
Summary:
The judgment deals with the misinterpretation of the Reserve Bank Master Circular on willful defaulters by a nationalized bank. The Master Circular outlines a fair procedure before classifying a person as a willful defaulter, emphasizing the importance of providing a reasonable opportunity for the borrower to defend against such classification. The Circular mandates the formation of a committee comprising high functionaries to make the preliminary decision on classifying a borrower as a willful defaulter.
The court highlighted the significance of following the procedure outlined in the Master Circular, which includes providing the borrower with reasons for the proposed classification and allowing them to make representations to a Grievance Redressal Committee. The Grievance Redressal Committee, headed by the Chairman and Managing Director, is responsible for considering the borrower's defense and weighing it against the evidence presented by the preliminary committee.
Furthermore, the judgment emphasizes the distinction between a defaulter and a willful defaulter, stating that only those defaulters who have diverted funds or have the ability to repay but choose not to pay should be classified as willful defaulters. In this case, the court set aside the preliminary opinion to classify the petitioners as willful defaulters due to the lack of reasons or evidence provided. The bank was directed to proceed afresh in accordance with the Master Circular.
The court clarified that its decision should not be seen as a certificate in favor of the petitioners, allowing the bank to gather the necessary evidence to classify them as willful defaulters and take appropriate action in line with the Master Circular. The writ petition was allowed without any order as to costs, and certified copies of the order were to be provided to the parties upon request.
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2013 (8) TMI 1162
Issues involved: Addition made on account of deposits in bank account with Centurion Bank of Punjab.
Summary:
The appeal was filed against the order of the Commissioner of Income-tax (Appeals) relating to assessment year 2008-09 under section 143(3) of the Income Tax Act, 1961. The issue raised was regarding the addition made on account of various deposits in the bank account with Centurian Bank of Punjab. The assessee, an insurance agent, had deposited Rs.29,56,000 in cash on different dates in her Saving Account with the bank. The Assessing Officer made an addition of Rs.29,56,000 as income from unexplained sources, which was upheld by the CIT(Appeals). The assessee contended that the deposits were rotated through her account on the advice of a bank consultant and that the peak balance was Rs.55,923. The case was heard, and it was found that the concept of peak theory needed to be applied to determine the quantum of addition. The issue was restored back to the Assessing Officer to verify the cash deposits and withdrawals, applying the peak theory to determine the addition in the hands of the assessee.
The Appellate Tribunal found merit in the plea raised by the assessee regarding the cash deposits and withdrawals. The Tribunal noted that while the assessee had made deposits in different denominations on different dates, the same amounts were withdrawn either on the same day or the next day. The Tribunal held that the concept of peak theory needed to be applied to ascertain the addition in the hands of the assessee. The case was sent back to the Assessing Officer to determine the initial cash deposit at the start of the year and to apply the peak theory to the various cash deposit and withdrawal entries during the year to calculate the addition in the hands of the assessee. The grounds of appeal raised by the assessee were allowed for statistical purposes, and the appeal was allowed accordingly.
In conclusion, the appeal was allowed for statistical purposes, and the case was remanded back to the Assessing Officer to apply the peak theory in determining the addition in the hands of the assessee based on the cash deposits and withdrawals in the bank account with Centurion Bank of Punjab.
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2013 (8) TMI 1161
Issues Involved:
1. Delay and laches in filing the claim petition.
2. Entitlement to promotion and consequential benefits.
3. Validity of ad hoc promotion and its cancellation.
Summary:
1. Delay and Laches in Filing the Claim Petition:
The Supreme Court addressed whether the Respondents could maintain a claim petition after nearly two decades since the junior employee, Madhav Singh Tadagi, was given ad hoc promotion on 15.11.1983. The Court emphasized that the Respondents were aware of the promotion but chose not to challenge it for six years and only approached the tribunal in 2003. The Court cited precedents, including *C. Jacob v. Director of Geology and Mining* and *Union of India v. M.K. Sarkar*, to assert that stale claims or dead grievances do not give rise to a fresh cause of action merely by submitting representations. The Court concluded that the Respondents' delay in challenging the promotion was unjustifiable and that the tribunal and High Court failed to appreciate the significance of delay and laches.
2. Entitlement to Promotion and Consequential Benefits:
The Respondents claimed entitlement to promotion from SAS Group III to SAS Group II from the date their junior was promoted on an ad hoc basis. The tribunal and High Court had directed that the Respondents be given notional promotional benefits from 15.11.1983. However, the Supreme Court held that while the Respondents could have challenged the ad hoc promotion at the relevant time, their failure to do so within a reasonable period negated their claim. The Court reiterated that the principle of equality and equitability in promotions must be claimed within a reasonable time, as established in *Ghulam Rasool Lone v. State of Jammu and Kashmir* and *New Delhi Municipal Council v. Pan Singh*.
3. Validity of Ad Hoc Promotion and Its Cancellation:
The Court noted that the ad hoc promotion of Madhav Singh Tadagi had been canceled by the competent authority during the pendency of the special leave petition, and this cancellation was under challenge before the High Court. The Supreme Court refrained from expressing any opinion on the cancellation's validity, as the matter was sub-judice. The Court emphasized that the tribunal and High Court's decisions to grant notional promotional benefits to the Respondents were unsustainable in law due to the significant delay in filing the claim.
Conclusion:
The Supreme Court allowed the appeals, setting aside the orders of the High Court and the tribunal. The Court held that the Respondents' claim was barred by delay and laches and that the directions to grant notional promotional benefits were unjustified. The appeals were allowed with no order as to costs.
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2013 (8) TMI 1160
Issues Involved:
The issue involves whether tax has been deducted at source on the entire amount of compensation awarded in Land Acquisition proceedings, specifically focusing on the distinction between interest awarded under Section 28 and Section 34 of the Land Acquisition Act, 1894.
Judgment Details:
1. The petitioners argue that tax deduction has been done on the entire compensation amount, excluding interest awarded under Section 28 of the Act. The Assistant Solicitor General disputes this, stating that there is no distinction between interest granted under Section 28 and Section 34.
2. The High Court finds that the issue is covered by a larger Bench judgment of the Apex court in "Bikram Singh Vs. Land Acquisition Officer," which distinguishes between compensation awarded over land and interest paid statutorily.
3. Sections 28 and 34 of the Act impose obligations on the Collector and the Court, respectively, to pay interest after compensation is determined. The nature of interest remains the same under both sections, and TDS must be deducted on the increased compensation amount if interest is awarded under Section 28.
4. The main dispute is whether TDS has been deducted only on the compensation amount or also on the interest awarded.
5. The Court directs the petitioners to represent the matter to the Income-Tax Officer within four weeks. If excess TDS has been deducted on both compensation and interest, it should be refunded to the petitioners.
6. Reference is made to the Apex Court judgment in "Commissioner of Income Tax, Faridabad Vs. Ghanshyam," which distinguishes between interest payable under Section 28 and Section 34. However, the High Court follows the larger Bench judgment in "Bikram Singh," as the former did not consider the latter.
7. In specific cases mentioned, where only 50% of the deducted amount has been forwarded to the Income Tax Officer, the Court restrains further forwarding until the matter is resolved. Refunds should be made if TDS is found to be incorrectly deducted on both compensation and interest.
8. The writ petitions are partly allowed and disposed of accordingly.
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2013 (8) TMI 1159
Issues involved: Quashing of prosecution against accused under Section 21(2) of the Contract Labour (Regulation and Abolition) Act, 1970 and Rule 72 of the Contract Labour (Regulation and Abolition) Central Rules, 1971.
Summary:
Issue 1: Prosecution against the accused as Directors and authorised signatories without the Company being arrayed as accused
The petitioners sought quashing of the prosecution against them in C.C. No. 825 of 2012 under Section 21(2) of the Contract Labour (Regulation and Abolition) Act, 1970 and Rule 72 of the Contract Labour (Regulation and Abolition) Central Rules, 1971. The main legal question raised was whether the prosecution against the petitioners as Directors and authorised signatories of the Company, without the Company itself being accused, is legally permissible.
Analysis: Section 25 of the Act deals with Offences by Companies, stating that if an offence is committed by a company, the company and individuals in charge of its business are deemed guilty. The Apex Court's decision in Aneeta Hada v. Godfather Travels and Tours Private Limited clarified that specific averments in the complaint are necessary to prosecute company functionaries for company offences. The Court emphasized that the company must be prosecuted for vicarious liability to apply to its functionaries.
Decision: The Court found that since the Company, the principal offender, was not prosecuted, the prosecution against the petitioners as Directors and authorised signatories was not maintainable. Citing the legal precedent, the Court quashed the prosecution against the petitioners in C.C. No. 825 of 2012 on the file of Additional MMTC-IV, Bangalore.
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