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Showing 21 to 40 of 1723 Records
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2017 (8) TMI 1709 - JAMMU AND KASHMIR HIGH COURT
Illegal suspension - seeking reinstatement after the expiry of three months - whether in a case where order of suspension is not followed by the service of memorandum of charges/charge-sheet on the delinquent officer within three months, as has been held in Ajay Kumar Choudhary’s case [2015 (6) TMI 592 - SUPREME COURT], could the respondents still continue the appellant under suspension only because the relevant regulations permitted suspension for a period of six months or even thereafter - HELD THAT:- In Ajay Kumar Choudhary’s case, it is found that the directions were clear and unambiguous and those were that the suspension order would not extend beyond three months if within that period the memorandum of charges/chargesheet was not served upon the delinquent officer/employee and if the charge-sheet was served, a reasoned order would have to be passed for extension of the suspension - these directions were not made subservient to the rules and regulations as applicable to delinquent officers and employees in individual cases.
Admittedly, in the present case, the charges were served upon the petitioner on 18.01.2017, that was beyond the period of three months as envisaged in the judgment and failure to serve the charges within this period would indeed entitle the appellant to reinstatement. The respondents, therefore, by placing reliance upon the PSB Vigilance Manual could not have extended the period of suspension thereafter or invoke its power to review the same for purposes of extending the same.
Respondents are directed to reinstate the appellant forthwith. It would however be free to transfer the appellant to any other office within or outside the State, so as to prevent any interference in the enquiry being conducted against him - appeal allowed.
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2017 (8) TMI 1708 - MADRAS HIGH COURT
Appellant bound by auction being conducted publicly under SARFAESI Act or not - no reason to believe there is willful under valuation - initiation of proceedings under Section 47(A) of the Indian Stamp Act - HELD THAT:- The appeal deserves to be allowed on two grounds. Firstly, what is challenged is only a notice issued after a reference made by the Registering Authority under Section 47(A) of the Indian Stamp Act. Under the above said provision once such a reference is made, the Collector shall give notice to the parties giving a reasonable opportunity of being heard - the writ petitioner instead of giving his representation and allowing an order to be passed under Section 47(A) of the Act and if aggrieved, challenging it before the forum provided under the Statute, ought not to have filed the writ petition. Hence, we are of the view that the writ petition so filed is not maintainable.
What has to be considered by an authority under Stamp Act is fixation of the value of an instrument on the basis of the market value of the property on the date on which the document was presented. Therefore it cannot be construed that such an authority would be diluted of his power in all the sales conducted publicly. The Registration Act mandates a separate Role being the duties assigned to a Registering Authority among others. Unless a Statute provides for such an exercise, Court cannot issue directions to accept the value fixed in an instrument merely because the sale was effected in pursuance of an open auction - the property must be sold by Public auction only by a civil or Revenue Court, or a collector or other revenue Officer. Therefore, even assuming a property sold by Public auction, such an exercise is to be done by a civil or revenue Court, Collector or Revenue officers as the case may be.
Now the question for consideration is as to whether the authorised officer appointed by the bank in a proceedings initiated under SARFAESI Act, by itself could be called as a civil or revenue Court Collector or Revenue Officer. The answer will have to be a firm 'No'. Only an officer of the bank, which lend money to the borrowers, acts as an authorised officer, only for the purpose of bringing the property for sale. In other words such officers merely replace the secured creditors. Hence at best they can be termed as an agent of secured creditors. In other words the secured creditors cannot be termed as Collector or Revenue Officers.
The SARFARESI Act merely provides for a mechanism. The lender uses the said mechanism to recover the money. Therefore it is only a mode of recovery. Lender can termed itself to a Civil or Revenue Court who's functions are purely judicial. Therefore, looking from any perspective, there are no error in the notice issued - appeal allowed.
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2017 (8) TMI 1707 - MADRAS HIGH COURT
Dishonour of Cheque - cheques filed along with the complaint are on the face of it forged and materially altered documents - plea of material alteration in the cheque can be canvassed and gone into the quash proceedings or not - HELD THAT:- The accused/revision petitioner has raised a plea that the cheque-in-issue suffers from material alteration in respect of date in few cheques and month in few cheques and amount in few cheques. It is to be stated that though the amount in figures as stated above, but the amount in words are clear. Further, whether the date and month has been altered or not? Whether it is altered by the drawer of the cheque or by the complaint is matter for fact that can be gone into only during trial.
Alteration was made by the drawer himself or whether it was made with consent of the drawer, it requires evidence to prove petitioner's contention had no legally enforceable debt is to be paid or not is a question of fact which needs to be proved and determined at trial by way of evidence - The decision in Apex Court in VEERA EXPORTS VERSUS T. KALAVATHY [2001 (11) TMI 934 - SUPREME COURT] wherein it was held that revalidation of the Negotiable instrument is a material alteration which fact has to be established by the way of evidence at the trial and the same cannot be determined on the mere assertion of the accused. Hence no case for quashing of the summoning order is made out in the present case.
In the instant case, it is only the assertion made by the petitioner that he did not made correction the cheque as he owed no legal liability towards petitioner. This fact needs to be ascertained by way of evidence and the same can be done at the trial and not in a petition under Section 482 Cr.P.C. The veracity of the plea of material alteration cannot be gone into in quash proceedings without trial.
This Court has no hesitation to come to the conclusion that alleged material alteration in date and amount in the chequein-issue cannot be gone into at this stage under 482 of the Cr.P.C and the same can be gone into only by the trial Court by adducing appropriate evidence and expert evidence if need be - Petition dismissed.
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2017 (8) TMI 1706 - SUPREME COURT
Framing of charges - direction for further investigation - whether the High Court was justified in allowing the prayer of Respondent No. 2 for further investigation Under Section 173(8) of Code of Criminal Procedure, in the fact situation of the present case? - HELD THAT:- The question as to whether, after framing of charges and taking cognizance, it is open to the Magistrate to direct further investigation either suo motu or on an application filed by the complainant/informant is no more res integra.
In a recent decision of this Court (to which one of us, Justice Dipak Misra was party) in the case of AMRUTBHAI SHAMBHUBHAI PATEL VERSUS SUMANBHAI KANTIBHAI PATEL AND ORS. [2017 (2) TMI 1539 - SUPREME COURT], after analysing earlier decisions on the point, it has been held that neither the Magistrate suo motu nor on an application filed by the complainant/informant can direct further investigation. Further investigation in a given case may be ordered only on the request of the investigating agency and that too, in circumstances warranting further investigation on the detection of material evidence only to secure fair investigation and trial, the life purpose of the adjudication in hand.
It is this well considered decision of the Trial Court, made subject matter of challenge before the High Court in the petition filed by Respondent No. 2. On a bare perusal of the impugned judgment of the High Court, we find that the High Court, on the one hand, noted its reservation as to how a complaint for the offence punishable Under Sections 417, 465, 468 and 471 of Indian Penal Code would be consistent with the allegations for the offence punishable Under Sections 306, 497, 498 of Indian Penal Code, yet, it proceeded to direct further investigation on the sole consideration that in the earlier round of proceeding instituted by the Appellant for quashing of the private complaint filed against him by Respondent No. 2 in respect of the same incident, liberty was given to Respondent No. 2 to approach the Trial Court for issuing direction to the investigating officer for further investigation Under Section 173(8) - The High Court was of the view that rejection of the application preferred by Respondent No. 2 for further investigation, therefore, would run counter to the liberty so granted and, on that consideration, directed the Trial Court to issue direction to the investigating officer for further investigation in respect of allegation made by the Respondent No. 2 in his complaint.
The High Court committed manifest error in interfering with the discretionary order passed by the Trial Court in the fact situation of the present case. In other words, the Trial Court had rightly rejected the prayer of Respondent No. 2 for further investigation, for the reasons noted in its order dated 7th August, 2014 - Appeal allowed.
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2017 (8) TMI 1704 - ITAT DELHI
Depreciation claim - plants of such units which stood completely closed for the last 8 years, as stated in the annual report - HELD THAT:- None of the parties before us have unfolded the actual assets, their WDV etc., on which the depreciation was claimed or disallowed. As a matter of fact, the dispute still remains whether the units, on assets of which, the assessee claimed depreciation, were completely closed for ever or were kept stand by after temporary suspension of production. The assessee has not produced any material before us that the said units were kept stand by. Rather, it has also been contended on behalf of assessee before us that though as per BIFR order, those non-operative units were supposed for sale, but no action has been taken so far on account of pending approval from the Government of India. All these facts need proper examination at the level of AO before deciding the eligibility of the impugned assets for depreciation u/s. 32.
We accordingly, remit the matter back to the file of AO for deciding the issue afresh in the light of observations made in the body of this order above. Assessee appeal is allowed for statistical purposes.
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2017 (8) TMI 1703 - SUPREME COURT
Application for discharge alleging that neither sufficient allegations are made nor evidence to prosecute the Appellant Under Section 420 Indian Penal Code was produced - application was filed by the Appellant seeking discharge on the ground that there are no evidence to frame charge Under Section 420 Indian Penal Code - HELD THAT:- It is clear that ingredients of Section 420 Indian Penal Code are not made out in the present case, either from the First Information Report or from any other material. From the First Information Report as extracted above only allegation made against the Appellant was that he accompanied his father Major P.C. Sahay (Retd.) when he assured that the money of the applicants will not be lost and it shall be the responsibility of his father (late P.C. Sahay).
In the First Information Report even allegation of making assurance was not made against the Appellant but was made against Major P.C. Sahay (Retd.), father of the Appellant. There was no allegation that the Appellant fraudulently or dishonestly induced the complainant to deposit money - This Court in Arun Bhandari v. State of Uttar Pradesh and Ors. [2013 (1) TMI 1049 - SUPREME COURT], has held that it is necessary to show that a person had fraudulent or dishonest intention at the time of making the promise. A mere failure to keep up promise subsequently cannot be presumed as an act leading to cheating.
The Chief Judicial Magistrate while rejecting the application of the Appellant for seeking discharge has not even referred to any allegation or evidence on the basis of which it can be said that ingredients of Section 420 Indian Penal Code were made out in the facts of the present case - in the present case ingredients of Section 420 Indian Penal Code were not made out so as to frame any charge Under Section 420 Indian Penal Code against the Appellant.
The order of the Chief Judicial Magistrate dated 28.02.2007 and the judgment of the High Court dated 21.10.2016 are set aside. The Appellant shall stand discharged from the charges Under Section 420 Indian Penal Code - Appeal allowed.
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2017 (8) TMI 1702 - CESTAT MUMBAI
CENVAT Credit - capital goods/inputs - MS plates, angles, channels, beams and rounds - rule 2 of CENVAT Credit Rules, 2004 - HELD THAT:- The use of steel items for fabrication of structures and structures for bearing machinery would appear to be excluded from the definition of capital goods. However, as per Explanation 2 in rule 2(k) of CENVAT Credit Rules 2004, such goods, if used for manufacture of capital goods which are further used in the factory of the manufacturer, are to be considered as inputs and the definition of capital goods in the said rules includes moulds. Therefore, the contention of the appellant that the inputs, on which CENVAT credit has been availed, are used in the manufacture of moulds cannot be dismissed without proper examination. The lower authorities have failed to do so.
The matter remanded back to the original authority for subjecting the claim of the appellant to the test of the definitions of input and capital goods in CENVAT Credit Rules, or 2004 - appeal allowed by way of remand.
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2017 (8) TMI 1701 - SUPREME COURT
Criminal Misconduct - Acquisition of assets disproportionate to known sources of income - applying corrupt and illegal means while acting as a public servant - benefit of doubt - Section 13(1)(e) read with Section 13(2) of Prevention of Corruption Act, 1988 (PCA) - HELD THAT:- The accusations on which the charge under Section 13(1)(e) read with Section 13(2) of the Act were framed against the appellant. Admittedly, having regard to the ultimate figures as calculated by the Courts below, the charge has undergone a metamorphosis. This assumes immense significance in view of the fact that no fresh charge had been framed on the allegations for which the appellant was eventually convicted and sentenced. Any adverse inference prejudicial to the appellant was thus not available in law, he not having been confronted with the altered imputations. To reiterate, the charge for which the appellant finally has been convicted wears a new complexion different from the one with which he had been arraigned at the initiation of the trial. The appellant thus for all practical purposes was subjected to a trial involving fleeting frames of accusations of which he was denied prior notice. This is clearly opposed to the fundamental precepts of a criminal prosecution.
A person cannot be subjected to a criminal prosecution either for a charge which is amorphous and transitory and further on evidence that is conjectural or hypothetical. The appellant in the determinations before the Courts below has been subjected to a trial in which both the charges and evidence on aspects with vital bearing thereon lacked certitude, precision and unambiguity.
In case the prosecution fails to prove that the public servant either by himself or through anyone else had at any time during the period of his office been in possession of pecuniary resources or property disproportionate to his known sources of income, he would not be required in law to offer any explanation to satisfactorily account therefor. A public servant facing such charge, cannot be comprehended to furnish any explanation in absence of the proof of the allegation of being in possession by himself or through someone else, pecuniary resources or property disproportionate to his known sources of income.
The prosecution has failed to prove beyond all reasonable doubt the charge of criminal misconduct under Section 13(1)(e) of the Act and punishable under Section 13(2) thereof against the appellant. He is thus entitled to the benefit of doubt. The prosecution to succeed in a criminal trial has to pitch its case beyond all reasonable doubt and lodge it in the realm of “must be true” category and not rest contended by leaving it in the domain of “may be true” - the appeal is allowed.
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2017 (8) TMI 1700 - ITAT CHENNAI
TP Adjustment - customs duty adjustment while computing Arm’s Length Price (ALP) - HELD THAT:- As similar issue came for consideration before this Tribunal in assessee's own case [2017 (1) TMI 1690 - ITAT CHENNAI] direct the A.O. to give suitable adjustment against the custom duty component while determining the ALP.
Non-granting of working capital adjustment while computing the ALP - HELD THAT:- As the similar issue came for consideration before this Tribunal in assessee's own case[2017 (1) TMI 1690 - ITAT CHENNAI] there is necessity for working capital adjustment and accordingly we remit the issue to the file of AO to consider the material for fresh consideration.
Treating foreign exchange loss suffered by the assessee as operating expense - Whether TPO erred in treating the entire foreign exchange loss suffered by the assessee as operating expense? - HELD THAT:- As in the present case as rightly pointed out by the ld.D.R that earlier year the assessee claimed foreign exchange loss as operating expenditure. This year assessee has shifted its stand and claimed it as non operating expenditure. There is no consistency in its approach and also no reason has been given for such a change. Being so, in our opinion, foreign exchange loss is to be treated as operating nature only. Hence, this ground is dismissed.
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2017 (8) TMI 1699 - KARNATAKA HIGH COURT
Deduction u/s 10A computation - Interpretation of Total Turnover & Export Turnover u/s 10A - HELD THAT:- As appellants fairly submits that the question raised in this appeal is answered against the appellants by this Court in CIT v. Tata Elxsi Ltd. [2011 (8) TMI 782 - KARNATAKA HIGH COURT]. Hence, no purpose will be served by ordering notice filed for condonation of the delay in filing the appeal. Appeal are accordingly dismissed.
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2017 (8) TMI 1698 - BOMBAY HIGH COURT
Revision u/s 263 by CIT - Share transactions entered into by the Assessee were not genuine - HELD THAT:- Initially the Assessment was done under Section 143(3) - HELD THAT:- Before passing the Assessment order the Assessee was called by the Assessing Officer seeking the details. The examination was done by the AO relating to sale and transactions of purchase shares entered into by the Assessee. Explanation was called from the Assessee. Assessee submitted explanation along with all the details i.e. the copy of the broker notes for purchase of shares, physical purchase of shares, the details of the share transactions, the copy of the account of broker, the proof of payment of share purchases of Praneta Industries Ltd., D-mat Account and after satisfaction the Assessing Officer passed a order under Section 143(3) of the Act.
Tribunal has observed that the Assessee had filed proof of the purchases in the shape of ledger account in the name of M/s.DPS Shares and Securities Pvt. Ltd., even the copy of the physical shares has been submitted on record. All the details of the transactions are reproduced by the Tribunal in the order. The order certainly cannot be said to be erroneous on the part of the AO. The order was passed by the AO u/s 143(3) of the Act, after making necessary inquiries and verifying the claim made.- No error has been committed by the Tribunal. No substantial question of law arises.
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2017 (8) TMI 1697 - ITAT KOLKATA
Penalty u/s 271(E) - violation of provisions of section 269SS & 269T - assessee submitted before the CIT (A) that transactions between husband and wife, and between father and son are not considered for the purpose of section 269SS and section 269T because they are not “other Person” as mentioned in section 269T - Assessee held transaction of loan which has a commercial identity cannot be transposed between a relation of husband and wife - HELD THAT:- We are of the view that the transaction between husband and wife does not fall in the definition of “any other person”, that is, the transaction between closely related person like husband and wife, father & son etc. They would fall outside the scope of section 269T of the Act. Therefore, in our opinion, a transaction of “loan” which has a commercial identity cannot be transposed between a relation of husband and wife. Therefore, considering the factual position, we are of the view that the penalty imposed by the Assessing Officer u/s. 271E and confirmed by the Ld. CIT(A) needs to be deleted. Accordingly, we delete the penalty. - Decided in favour of assessee.
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2017 (8) TMI 1696 - ITAT MUMBAI
Characterization of income - Interest income - income from other sources or business income - CIT-A treating in interest income as business income - Whether no business activity was carried out during the year? - HELD THAT:- We find that the AO has not made any inquiry or verification to arrive at his finding that interest income was to be treated as ‘income from other sources’. As mentioned by the Ld. CIT(A) in the assessee’s own case for the AY 2006-07, 2007-08 and 2008-09, the AO has accepted the contention of the assessee that the income of investing and financing be assessable as income from business. The need for consistency has been emphasized by the Hon’ble Supreme Court in Radhasoami Satsang [1991 (11) TMI 2 - SUPREME COURT] - we uphold the order of the Ld. CIT(A) and dismiss the 1st ground of appeal.
Disallowance of Expenses as no business activity was carried out by the assessee during the year - HELD THAT:- A company may not obtain, or able to execute, a single business contract for months and yet it may be deemed to carry on its business, if during the period of lull and inactivity it is kept alive and if it retains its registered office and holds meetings. It is not necessary that a business to be in existence should have work all the time. There may be long intervals of inactivity and a concern may still be a going concern, though it may, for some time, be quiet and dormant. The mere fact that a businessman has not been able to obtain a contract and the business has for some time been in that sense dormant would not mean that it has ceased to exist, if the assessee continues to maintain an establishment and incur expenses in the expectation that work would come and the business would be successful - Thus we find that the disallowance made by him is not based on any material or reasons. 2nd ground of appeal is dismissed.
Addition made of account of interest - as per TDS certificate the interest income pertained to A.Y. 2009-10 - HELD THAT:- We find that interest of Rs.20,80,817/- out of Rs.26,90,478/- on account of interest received from Patel Engineering Ltd. was offered to tax in the AY 2008-09. Also M/s Patel Engineering Ltd. was given the interest, net of TDS, of Rs.20,80,817/- on 03.10.2007 vide cheque no. 143318. Therefore, the Ld. CIT(A) has rightly directed the AO to delete the addition to the extent of Rs.20,80,817/- out of Rs.26,90,478/-. Also the Ld. CIT(A) has rightly sustained the addition of the balance amount of Rs.6,09,661/- being the amount of TDS deposited by the payer namely Patel Engineering Ltd. during the AY 2009-10. Thus we uphold the order of the Ld. CIT(A) on the above ground and dismiss the 3rd ground of appeal.
Disallowance u/s 40(a)(ia) - submissions made by the assessee at the time of appellate proceedings without giving an opportunity of the assessing officer for verification of the same - CIT(A) has held that perusal of the expenditure claimed as deduction revealed that tax is deductible only on the interest expenditure of Rs.6,18,131/- (Rs.5,95,837 + Rs.23,904) as all other expenditure incurred is below threshold for deduction of tax at source and TDS has been made in the case of interest payment to Ace Housing and Construction Ltd., AHCL PEL - HELD THAT:- CIT(A) Correctly deleted the disallowance u/s 40(a)(ia) - order of the AO in respect to the above ground of appeal is not based on material evidence - findings of the Ld. CIT(A) based on examination of the documents, we uphold the order of the Ld. CIT(A) and dismiss the 4th ground of appeal.
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2017 (8) TMI 1695 - RAJASTHAN HIGH COURT
Reopening of assessment u/s 147 - "reason to believe" - Disallowance of deduction u/s 80HHC - whether there was any failure on the part of the petitioner-assessee to disclose fully and truly all material facts necessary for the assessment? - HELD THAT:- The basic requirement of section 80HHC is earning in foreign exchange and retention of profits for export business. Profits are embedded in the "income" earned. Earning of income depends on sale of goods and services. Today the difference between the two is getting blurred with globalization and cross-border transaction. Today with technological advancement one has to change our thinking regarding concepts like goods, merchandise and articles. In the case of B. Suresh [2009 (3) TMI 4 - SUPREME COURT] the assessee had bought rights of various decoders and had recorded movies on beta-cam tapes which were transferred as telecasting rights to Star TV for five years (it has a limited life). Hence such "rights" would certainly fall in the category of articles of trade and commerce, hence, merchandise.
Transaction in question was covered under section 80HHC, it was inappropriate to hold that merely because section 80HHF was not on the statute book during the assessment years in question, the assessee was not entitled to claim deduction without any hindrance under section 80HHC in spite of compliance of the ingredients thereunder.
Reopening of assessment - Taking into consideration the main aspect that the earlier order has not been challenged and the basis for Section 148 was not sound, it ought to have been quashed in view of the decision reported in the case of CIT Vs. Kelvinator of India Ltd. [2010 (1) TMI 11 - SUPREME COURT] one needs to give a schematic interpretation to the words "reason to believe" failing which, we are afraid, Section 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of "mere change of opinion", which cannot be per se reason to re-open - The Assessing Officer has no power to review; he has the power to re-assess. But re-assessment has to be based on fulfillment of certain pre-condition and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then,in the garb of re-opening the assessment, review would take place - to reopen an assessment tangible material should be there.
Meaning of the expression, `reason to believe' had been explained in a number of court rulings in the past and was well settled and its omission from Section 147 would give arbitrary powers to the Assessing Officer to reopen past assessments on mere change of opinion. To allay these fears, the Amending Act, 1989, has again amended Section 147 to reintroduce the expression `has reason to believe' in place of the words `for reasons to be recorded by him in writing, is of the opinion'. Other provisions of the new Section 147, however, remain the same. - Decided in favour of assessee.
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2017 (8) TMI 1694 - ITAT CHENNAI
Levy penalty u/s. 271 (1)(c) - admitting the rental income under the head income from 'house property' has claimed deduction of 30% of the rentals u/s.24(a) - claim of depreciation on let-out buildings - HELD THAT:- There is a double deduction claim, which is not permitted in the Act. The fact of claiming depreciation on the let-out buildings has come to the notice of the Assessing Officer only during the course of assessment proceedings. Thus, there is a clear concealment of taxable income, by furnishing inaccurate particulars, on account of claiming depreciation on the let-out buildings. Therefore, the assessee’s explanation is found to be false within the scope of Explanation1 r.w.s. 271(1)( c). On such facts and circumstances, the Assessing Officer and the CIT(A) have rightly concluded that the claim of depreciation on let-out buildings is a concealment of income by furnishing inaccurate particulars and hence the levy penalty u/s. 271 (1)(c) on this issue is confirmed.
AO disallowed assessee's claims of 'provisions for warranties" debited in P&L account holding that they are unascertained liabilities - The assessee has admitted the income for the period for which the ITAT has decided the appeals ie for ays 1997 & 1998 in its revised return. It’s explanation that its appeals for ays, 1999-00 and 2000-01 was pending before the ITAT as on the date of filing the revised return for ay 2003-04 and hence it did not admit the income related to those ays is a fact, as per the chronological events extracted, supra. Neither the AO nor the CIT (A) found that this explanation of the assessee to be false. Hence, on this issue, there is no ground to levying penalty u/s 271(1) (c) read with Explnation1. In view of that the penalty levied on this issue is directed to be deleted. All the grounds of appeal on this issue is allowed.
Assessee’s appeal is allowed partly.
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2017 (8) TMI 1693 - MADHYA PRADESH HIGH COURT
Rejection of application preferred by the petitioner as accused under Section 91 of Cr.P.C. read with Section 165 of Indian Evidence Act - application preferred by the petitioner, rejected, mainly on the ground that petitioner cannot seek document under Section 91 of Cr.P.C. during cross examination of complainant - HELD THAT:- It appears that the complainant has categorically admitted the fact that he is submitting income tax returns for last 3 to 4 years and he has handed over a sum of Rs.86 lacs in cash to the petitioner. The amount as mentioned in the complaint is a huge amount and in all probability in usual course of business either, is reflected in the accounts book, bank account, income tax return etc., therefore, petitioner moved an application under Section 91 of Cr.P.C. so that controversy can get clarity in respect of factual averments. Therefore, petitioner was right in moving the application seeking those documents on record to confront the complainant about the statement made by him vis a vis documents.
Whether petitioner could have availed of such opportunity under Section 91 of Cr.P.C. while confronting the complainant? - HELD THAT:- The trial Court has relied upon the judgment rendered by the Hon'ble Apex Court in the matter of State of Orissa Vs. Debendra Nath Padhi [2004 (11) TMI 564 - SUPREME COURT] wherein the Hon'ble Apex Court has held that remedy of application under Section 91 of Cr.P.C. is not available to the accused at the time of framing of charge.
In the fact situation of the case, trial Court has erred in rejecting the application preferred by the petitioner. Once the necessity and desirability of documents to be summoned has been established then the trial Court ought to have called the documents to confront the witnesses. For doing complete justice between the parties, it is imperative that petitioner be allowed to confront the complainant by the documents to be summoned in defence of the accused.
Matter is remanded back to the trial Court for consequential follow up action to summon the documents as mentioned in the application preferred by petitioner under Section 91 of Cr.P.C. while affording opportunity to confront the complainant with the aid and support of those documents - Petition disposed off.
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2017 (8) TMI 1692 - ITAT CHENNAI
Disallowance of expenses u/s. 14A r.w.r. 8D - CIT(A) erred in confirming the disallowance to the extent of 5% u/s. 14A(1) relying on the decision in the matter of Celebrity Fashions Ltd. which is wholly inapplicable in the circumstances of the present case - HELD THAT:- DR relied on the orders of the CIT(A). We heard the rival contentions. We hold that even prior to assessment year 2008-09 (Pre Rule 8D era), the nature of disallowances specified u/s. 14A(1) has to be made on a rational basis. This tribunal held in large number of its decisions that the reasonable basis for the disallowance u/s. 14A should be 2% of the exempt income earned in the year 2007 and before. AO is directed to determine the expenses attributable to the exempt income, at the rate 2% of the total exempt income for the assessment years 2005-06 & 07-08 respectively.
Disallowance of provision for warranty - assessee had made provision for warranty in the books of account and the AO refused to allow it for the reason that this provision for warranty was credited without any scientific reasons - HELD THAT:- Thus, the contention of the assessee is that the provision is an ascertained liability, whereas, the revenue observed it as contingent liability. It is clear from the assessment order that the assessee could not explain the methodology and calculation of the provisions on the basis of the satisfactory aspects in the case of Rotork Controls India Ltd. [2009 (5) TMI 16 - SUPREME COURT] - we are of the opinion that the matter has to be reexamined as to whether the methodology adopted for creating provision is in the light of the observations made by the Supreme Court. Therefore, we set aside the order of the CIT(A) and remit this issue to the file of the AO for re-examination after affording adequate opportunity for being heard to the assessee. Thus, the Revenue’s cross appeal is treated as allowed for statistical purposes.
TDS u/s 194C - Disallowances of provision of sub-contract expenses and provision of labour charges u/s. 40(a)(ia) - HELD THAT:- It is clear that the assessee had made provision for subcontract and provision of labour/their contractors in the books of accounts. As per section 40(a)(ia) r.w.s. 194C, it is clear that the TDS has to be made at the time of credit of such sum to the account of the contractor or at the time of payments thereof in cash or by issue of cheque or draft or by any other mode, whichever is earlier. It is clear that when the assesse has made the provisions i.e., when it has credited such sum to the account of the subcontractors/labour/their contractors, it should have deducted TDS but failed to do so. In view of that, the findings recorded by the CIT(A) do not require any interfere on these grounds. We find merit in the decision of the CIT (A) in allowing the alternate claim by directing the AO to examine as to whether the impugned amounts were subsequently directly credited to the respective sub-contractors account/respective persons account, necessary TDS was deducted and remitted to the Government in the subsequent year and if so to allow necessary deduction in the financial year(s), wherein the assessee has actually has deducted and remitted the TDS into Government account subject to verification and the assessee furnishing of necessary evidence.
Disallowance u/s. 40(a)(ia) - commission paid to Mehrtash Trading Enterprises (LLC) and the royalty paid to FFE Minerals Corporate, USA, without deducting the TDS - HELD THAT:- We find that, though the assessee has raised substantive appeal grounds before the CIT(A), the CIT(A) has not adjudicated them. In view of that these issues are remitted back to the CIT(A). The CIT(A) after affording due opportunity to the assessee, shall pass a speaking order on these issues.
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2017 (8) TMI 1691 - JHARKHAND HIGH COURT
Criminal conspiracy - fund was allotted in the National Rural Health Mission ( NRHM) and was financed by the Government of India. It is alleged that more amount was spent than the allocated budget - medicines and equipments have been purchased at exorbitant rate and in excess without ascertaining the requirement by procuring false documents - sections 120B, 420, 467, 468 and 471 of the Indian Penal Code and Section 13(i)(c)13(i) (d) read with Section 13 (2) of the Prevention of Corruption Act.
HELD THAT:- The grounds taken by the petitioner in his application under section 205 Cr.P.C. seems to be contradictory since on the one hand he claims to be travelling widely and on the other hand he seems to be a person suffering from large number of ailments. It is true that criminal proceedings were quashed by this Court on 5.4.2013 but the position was restored when the Hon’ble Supreme Court had set aside the order passed by this Court on 29.9.2015. For the period 5.4.2013 to 29.9.2015, it cannot be said that the petitioner had a hand in delaying the case or for not appearing as during that period there was no criminal case in existence so far as petitioner is concerned.
Principles governing an application under section 205 Cr.P.C. have not been appreciated by the learned court below and the discretion which has to be judiciously exercised also does not find place in the impugned order dated 6.9.2016. The petitioner apart from being a busy executive has also taken the ground of serious ailments but the learned court below has merely recorded the submissions of the petitioner without giving any finding with respect to the same which would be necessary to show that the learned court below has exercised its jurisdiction in a judicious, legal and proper manner.
The matter is remanded back to the learned court below to pass a fresh order in accordance with law after hearing the respective parties - Application allowed.
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2017 (8) TMI 1690 - ITAT AHMEDABAD
Deduction u/s.80P - interest income received by the appellant from Fixed Deposit of nationalized banks under the head income from other sources u/s.56 - HELD THAT:- As stated the assessee deposited the amount in nationalized bank not in Co-operative bank. So far interest income is not eligible for deduction u/s.80P of the I.T. Act. Therefore, we are not inclined to given any relief to the assessee with regard to Ground No.1.
Assessee incurred some expenses on the deposit for making FD and also incurred expenses with regard to interest etc. - As relying on case of Totgars Co-operative Sale Society Ltd. [2015 (4) TMI 829 - KARNATAKA HIGH COURT] the appellant is entitle for deduction of proportionate expenditure or actual expenditure which the appellant may have incurred in mobilizing the funds placed in deposit with the bank and the same needs to be calculated by the Assessing Authority. We remit this matter back to the file of the Assessing Officer who will examine the case of the assessee that how much expenditure he has incurred in mobilizing the funds and thereafter, Assessing Officer will pass an appropriate order.
Appeal filed by the assessee is partly allowed.
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2017 (8) TMI 1689 - ITAT AMRITSAR
Exemption u/s 11 - rejection of application u/s 12AA - no activity was carried out by a trust or institution - proof of charitable activity u/s 2(15) - HELD THAT:- The reasons given by the Ld. CIT(E ) does not sound good because , one side reasoned that no activity has been carried out by the Assesse Trust , on the other hand has doubted the intents of the objects and further observation that initially the Assessee wanted to construct school & meditation hall at Asar Doda but later purchased land for school at Niabhat, Nagrota , in our view , the trust that time was undoubtly at nascent stage and has not carried out any activity except to make efforts for procuring land for school however later on purchased the land for school at Niabhat, Nagrota , which clearly shows the intention of the trust as the main object of the trust is to establish schools etc. and to provide education, therefore, one can expect from the trust to do activity of the charity immediately and in that situation the authority cannot come to the conclusion that the intent contained in the objects of the trust do not find corroboration in the shape of any positive action taken towards either education or any of the other objects enunciated in the trust deed , as observed by the ld.CIT (E ) .
Third reason that the activities of assessee trust are controlled by one family is only an apprehension of the Ld. CIT (E ) which according to our mind can not base rejection of the registration because the Revenue Authority is at liberty to withdraw and/or to cancel the Registration an any time on the specified reasons enumerated in the Act.
As from the documents filed before us, it reflects that the assessee trust has already purchased the land which is 9 kanals 19 marlas situated at Village Balian, Teshil Udhampur, and further also got approved sanctioned plan for construction of school from the concerned Executive Engineer of the area , no objection for construction from the concerned Panchayat and construction of School is at advance stage and also executed Memorandum of Understanding with the Bhartiya Shiksha Samiti, which is involved in the field of imparting formal education having established a number of Primary and Secondary level Schools in different part of Jammu & Kashmir as submitted.
Even otherwise if no activity was carried out by a trust or institution, still registration can be granted by the CIT(E) and even otherwise it is not the case of the Revenue that at the time of consideration of application of the Assessee , the assessee has carried out many activities and their genuineness were in doubt but in the instant case grievance of the CIT(E) is only that there was no activity carried out by the assessee.
As at the time of disposal of application, the Ld. CIT(E) in order to satisfy himself about the genuineness of the activities of the trust or institution can call for such documents or information from the trust or institution as he thinks necessary and also empowered to make such enquiry as he may deem fit necessary in this behalf , secondly that after satisfying himself about the object of the trust or institution and the genuineness of the activities, he shall pass order in writing either register or refusing to register the trust or institutions. In the instant case no activity was carried out therefore question of genuineness did not arise.
Hence, we direct the Ld. CIT(E) to grant the registration u/s 12A of the Act to the assessee and it is clarified in case, the assessee does not qualify/satisfy the objects of the trust and/or not involved in genuine activities , then the concerned authority shall be at liberty to withdraw or to cancel the registration u/s 12A of the Act. Appeal filed by the assessee is allowed.
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