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Showing 21 to 40 of 1288 Records
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2014 (9) TMI 1275
TDS u/s 194J - disallowance made u/s. 40(a)(ia) on account of payments made for services of market survey - HELD THAT:- Fee for professional services-FPS is defined in the Explanation to section 194J and it is exhaustive definition and of course, with the power to notify the professions. Therefore, the definition is exhaustive in form in view of the use of expression "means" and inclusive in substance as the Board has power to extend the list of professional services.
As per the said Explanation qua fee for professional services, the services rendered by a person in the course of carrying on listed professions and other notified professions constitutes fee for professional services and thus the payments in connection with such services attracts the provisions of section 194J - The payer is legally bound to make TDS at the rate of 10 per cent of such payment.
We have also examined the notification issued by the Board for the purpose of Explanation (a) to section 194J vide Notification No. S.O. 2085(E), dated August 21, 2008 and find the Board notified the services rendered by following persons in relation to the sports activities as "professional services" for the purpose of the said section, namely, sports persons, umpires and referees, coaches and trainers, team physicians and physiotherapists, event managers, commentators, anchors and sports columnists.
As decided in VYSYA BANK LIMITED. [2005 (9) TMI 55 - KARNATAKA HIGH COURT] when the definition of a word begins with ‘means’ it is indicative of the fact that the meaning of the word has been restricted; that is to say, it would not mean anything else but what has been indicated in the definition itself.
We find that no material was brought before us to show that market survey has also been notified as professional service within the meaning of section 194J - In absence of any such material brought before us, in our considered view, market survey is not covered by the provisions of section 194J - Consequently, the orders of the lower authorities in disallowing the expense are not sustainable. We, therefore, delete the disallowance and allow the ground of appeal of the assessee.
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2014 (9) TMI 1274
Delay in Arbitral Proceedings - inspite of expiry of four years, the said tribunal did not complete the arbitral proceeding - whether such a course of action has to be necessarily adopted by the High Court in all cases, while dealing with an application Under Section 11 of the Act or there is a room for play in the joints and the High Court is not divested of exercising discretion under some circumstances? If yes, what are those circumstances? - HELD THAT:- It is this very aspect which was specifically dealt with by this Court in NORTH EASTERN RAILWAY VERSUS TRIPPLE ENGINEERING WORKS [2014 (8) TMI 1236 - SUPREME COURT]. Taking note of various judgments, the Court pointed out that the notion that the High Court was bound to appoint the arbitrator as per the contract between the parties has seen a significant erosion in recent past.
In the case of contracts between Government Corporations/State owned companies with private parties/contractors, the terms of the agreement are usually drawn by the Government company or public sector undertakings. Government contracts have broadly two kinds of arbitration clauses, first where a named officer is to act as sole arbitrator; and second, where a senior officer like a managing director, nominates a designated officer to act as the sole arbitrator - If the Government has nominated those officers as arbitrators who are not able to devote time to the arbitration proceedings or become incapable of acting as arbitrators because of frequent transfers etc., then the principle of 'default procedure' at least in the cases where Government has assumed the role of appointment of arbitrators to itself, has to be applied in the case of substitute arbitrators as well and the Court will step in to appoint the arbitrator by keeping aside the procedure which is agreed to between the parties. However, it will depend upon the facts of a particular case as to whether such a course of action should be taken or not. What we emphasise is that Court is not powerless in this regard.
The Appellant has not questioned the order of the High Court in so far as it has terminated the mandate of the earlier Arbitral Tribunal because of their inability to perform the task assigned to them. In such a situation, leaving the Respondent at the mercy of the Appellant thereby giving the power to the Appellant to constitute another Arbitral Tribunal would amount to adding insult to the serious injury already suffered by the Respondent because of non conclusion of the arbitral proceedings even when the dispute were raised in the year 2007.
Where the Government assumes the authority and power to itself, in one sided arbitration clause, to appoint the arbitrators in the case of disputes, it should be more vigilant and more responsible in choosing the arbitrators who are in a position to conduct the arbitral proceedings in an efficient manner, without compromising with their other duties. Time has come when the appointing authorities have to take call on such aspects failing which (as in the instant case), Courts are not powerless to remedy such situations by springing into action and exercising their powers as contained in Section 11 of the Act to constitute an Arbitral Tribunal, so that interest of the other side is equally protected.
There are no merit in the present appeal which is dismissed.
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2014 (9) TMI 1273
Reopening of assessment u/s 147 - inability of the AO to produce the reasons recorded or to produce the evidence of supply of the copy of reasons to the assessee - HELD THAT:- Whatever may be the reason but it is mandated by the Hon’ble Courts that reasons to believe must necessarily show, indicate and communicate why and for what grounds/cause any income has escaped assessment. Recording of reasons has been emphasised and adverted to as the foundation of the jurisdiction of an AO, who initiates reassessment proceedings.
The validity of the reassessment proceedings is tested, by the Hon’ble Courts, on the basis of the underlying reasoning stated and recorded for opening of the reassessment. If the person affected by the action of the AO is not aware as to why the AO had found it fit to reopen his assessment, he will be in dark and will not be in position to defend himself.
Principles of natural justice demand that nobody should be penalise unheard. Without furnishing the assessee a copy of the reasons recorded would tantamount to punish the assessee without hearing him. The power of the to issue notice u/s. 147 of the Act is coupled with the duty to follow a prescribed method. A duty has been cast upon him to supply the copy of reasons recorded to the assessee.
Rights are always accompanied by duties and bigger rights brings higher the duties in picture. Power given to the AO by section 147 is not a simple power it is to unsettle the completed proceedings and it generally results in higher tax liability. Therefore, safeguards have been provided in the Act.
Duty of the AO to communicate the reasons to the assessee is the other side of the coin and is the right of the assessee. The assessee cannot be burdened only with duties. His duty is to file the return once he gets the notice. Similarly, his right to know the reasons starts once he files a return and asks the AO to supply him the copy of recorded reasons.
Case-issuance of notice u/s. 148 of the Act, the requests made by the assessee during assessment and after the assessment/appellate proceedings, the inability of the AO to produce the reasons recorded or to produce the evidence of supply of the copy of reasons to the assessee-we are of the opinion that validity of the assessment order and the subsequent order of the FAA cannot be upheld. Therefore, in the cases of Videsh Sanchar Nigam Ltd [2011 (7) TMI 715 - BOMBAY HIGH COURT] and Fomento Resorts and Hotels [2006 (11) TMI 645 - BOMBAY HIGH COURT] we are of the opinion that the order passed by the AO was not valid. The action of the AO has resulted in violation of basic principles of natural justice as well as invaluable right of the assessee. His order is beyond validity, so it is unsustainable. Decided in favour of assessee.
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2014 (9) TMI 1272
Seeking to restrain the respondent from invoking the letter terminating two Supply and Service Agreements - grievance relates to alleged breach of promise on part of the State where claimant has acted to his prejudice on basis of assurance or promise on the part of the State, but the agreement is short of a contract within the meaning of Article 299 of the Constitution - rights are purely contractual and claimant alleges breach by the State of a term of the contract.
HELD THAT:- The legal position which can be summarized would be that a bank guarantee is an independent contract between the bank and the beneficiary and disputes pertaining to bank guarantees have to be resolved de-hors the terms of the main contract between the parties or disputes relatable to the main contract between the parties. Where a bank guarantee is a conditional guarantee invocation thereof would have to be in strict conformity with the conditions on which the guarantee is issued. In such a case an injunction can be granted against payment under the bank guarantee if it is found that the condition upon which the guarantee was issued has not been complied with or met. But where the guarantee is unconditional and/or the bank has agreed to make payment without demur or protest, on the beneficiary invoking the bank guarantee the bank is obliged to honour the same for the reason like letters of credit, a bank guarantee if not honoured would cause irreparable damage to the trust in commerce and would deprive vital oxygen to the money supply and money flow in commerce and transaction which is necessary for economic growth. Disputes pertaining to the main contract cannot be considered by a court when a claim under a bank guarantee is made and the court would be precluded from embarking on an enquiry pertaining to the prima facie nature of the respective claim of the litigating parties relatable to the main dispute.
The dispute between the parties to the underlying contract has to be decided at the civil forum i.e. a civil suit if there exists no arbitration clause in the contract or before the arbitral tribunal if there exists an arbitration clause in the contract. Pendency of arbitration proceedings is no consideration while deciding on the issue of grant of an interim injunction. That certain amounts have been recovered under running bills and have to be adjusted for is of no concern in matters relating to invocation of bank guarantee. That there are serious disputes on questions as to who committed the breach of the contract are no circumstances justifying granting an injunction pertaining to a bank guarantee. Plea of lack of good faith and/or enforcing the guarantee with an oblique purpose or that the bank guarantee is being invoked as a bargaining chip, a deterrent or in an abusive manner are all irrelevant and hence have to be ignored. There are only two well recognized exceptions to the rule against permitting payment under a bank guarantee.
Contractual disputes cannot be projected by attempting to urge that the beneficiary under the bank guarantee is in default. Issues of fraud require pleadings to bring out a case of a fraud of an egregious nature and we do not find any brought out in the pleadings. The irretrievable injury or irretrievable injustice or special equity would mean a situation where the party at whose behest the bank guarantee is issued is rendered remediless.
Appeal dismissed.
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2014 (9) TMI 1271
Seeking to restrain respondent No. 1 from invoking, and respondents No. 2 and 3 from allowing any purported encashment of the bank guarantees submitted by the petitioner to respondent No. 1 pursuant to the contracts entered into between petitioner and respondent No. 1.
HELD THAT:- There are 8 bank guarantees which have been invoked by the respondent on 14th May, 2014 and the said bank guarantees contain different terms and conditions in the guarantee documents which are worded distinctly. The said aspect needs consideration in view of the well settled principle of law that the bank guarantee is a contract independent from the underlying contract and in order to test as to whether the invocation of the bank guarantee is as per the contract, the stipulations contained in the document of bank guarantee are germane as against the terms of the underlying contract/ main contract which may or may not be relevant depending upon the incorporation of the terms of the main contract in the guarantee documents.
From the reading of the terms of the Bank guarantees Nos. 0910310BG0000163 and 0910310BG0000165, it can be seen that the bank has guaranteed to repayment to said amount to the employer without cavil in the event the contractor fails to commence or fulfil the obligations under the terms of the contract and in the event of such failure refuses to repay all or part of the said advance payment to the employer. It is thus apparent that the liability of the bank would commence when the bank is informed about the demand on the ground of the failure to commence or fulfilment of the obligations under the terms of the contract and the refusal to pay the said sum or part of the advanced sum.
The repayment of the advance sum and/ or adjustment by way of the repayment and/or information as to refusal to repay by the contractor the said advance sum or part thereof are crucial facts which affect the liability of the bank as per the terms of the bank guarantee Nos.0910310BG0000163 and 0910310BG0000165. Accordingly, the said facts of the refusal to repay by the contractor or repayment of the advanced sum either in part or in full and adjustment of the advanced sum by way of the payment are pre- requisite conditions on the basis of which, the bank can honour the guaranteed sum after getting itself satisfied in terms of the bank guarantee.
The bank guarantees Nos.0910310BG0000163 and 0910310BG0000165 are conditional in nature and the invocation of the said bank guarantees by way of the letter dated 14th May, 2014 without fulfilment the mechanism provided in the guarantee documents by informing the petitioner about the repayment of the advanced sum and seeking the refusal or acceptance to repay is clearly contrary to the express terms of the guarantee documents. The said invocation is therefore prima facie contrary to the terms of the bank guarantee Nos.0910310BG0000163 and 0910310BG0000165 and as such liable to be interfered with by this Court.
The question relating to providing of the right to way or forest clearances by the respondent is a disputed question and cannot aid the petitioner at this stage by seeking to prevent the invocation of the bank guarantees at this stage and more so when the petitioner is not remediless and can always lodge its claim in arbitral proceedings if it has any in relation to breaches as alleged by the petitioner and the tenability of the same shall be examined by the Arbitral Tribunal.
It can be safely said that there is no such case of the special equities which is made out by the petitioner which leaves the petitioner as remediless to recover the said sum nor the said special equities as alleged by the petitioner are such which unequivocally establish the facts the complete non entitlement of the respondent to invoke the bank guarantees by the respondent. The respondent No. 1 has its own version of the nature of breaches done by the petitioner and the evaluation of the same cannot be done by this court on merits while deciding the application seeking interim measures at this stage. The said questions are disputed ones which are required to be examined and adjudicated by the arbitral tribunal to be appointed in the matter.
So far as bank guarantees Nos.0910310BG0000163 and 0910310BG0000165 are concerned, it hereby directed that the amount equivalent to what has been stated in the invocation letters dated 14th May, 2014 pertaining to the said bank guarantees i.e. Rs.9,60,63,392 is returned to the bank i.e. respondent No. 2 along with the interest accrued on the said amount and same be put in the original position. The petitioner shall keep the said bank guarantees alive by renewing them, if need arises. It is hereby clarified that the above direction does not preclude the parties to deal with the said bank guarantees as per mechanism provided in the guarantee documents.
The petition is accordingly disposed of.
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2014 (9) TMI 1270
Allocation of Coal Blocks - HELD THAT:- A report dated 01.09.2014 has been submitted by the Central Bureau of Investigation (CBI). It is stated that Shri R.S. Cheema has been appointed as Special Public Prosecutor by the Government of India vide notification dated 27.08.2014 in cases pertaining to allocation of coal blocks as per this Court's order dated 25.07.2014. It is also stated in the report that Shri R.S. Cheema has now requested for attachment of three Senior Public Prosecutors, namely, (1) Shri A.P. Singh, Senior Public Prosecutor, ACB CBI, Guwahati, (2) Shri Sanjay Kumar, Senior Public Prosecutor, Special Crime-1, CBI Headquarter, New Delhi and (3) Shri V.K. Sharma, Senior Public Prosecutor, ACB, CBI, Delhi to assist him in cases pertaining to allocation of coal blocks.
The request made by Special Public Prosecutor, Shri R.S. Cheema is reasonable and may be accepted.
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2014 (9) TMI 1269
Deduction u/s 80IB/80IC/80IE/10B - exclusion of the receipt by way of DEPB credit as they are not qualify to be included in the profits derived from the undertaking - HELD THAT:- The issue raised vide this ground has been decided against the assessee by the judgment of the Hon’ble Supreme Court in the case of Liberty India Ltd. [2009 (8) TMI 63 - SUPREME COURT]. As the receipts do not have a first degree nexus with the profit derived from the undertaking, respectfully following the judgment of the Hon’ble Supreme Court, ground No. 1 is dismissed.
Deduction from the income of the assessee being amount of credit under DEPB scheme - HELD THAT:- As in identical issue was considered by the Tribunal in assessee’s own case [2014 (7) TMI 1372 - ITAT MUMBAI] - We find that the Tribunal has decided this issue at para No. 5 of its order wherein it has followed the judgment of the Hon’ble Supreme Court in the case of CIT vs. Excel Industries Limited. [2013 (10) TMI 324 - SUPREME COURT] Respectfully following the decision of the co-ordinate Bench, ground No. 3 raised by the assessee is allowed.
Bogus purchases - HELD THAT:- We find that the Tribunal has considered this issue in assessee’s own case[2014 (7) TMI 1372 - ITAT MUMBAI] for A.Y. 2009-10 wherein it has followed the decision for A.Y. 2008-09 and accordingly the Tribunal has remanded this matter to the file of the A.O. for fresh adjudication after affording a reasonable opportunity of being heard to the assessee. As no distinguishing fact has been brought before us, respectfully following the findings of the co-ordinate Bench, we restore this issue to the file of the A.O. for fresh adjudication after hearing the assessee. Ground No. 4 is accordingly allowed for statistical purpose.
Weighted deduction u/s 35(2AB) - HELD THAT:- We restore this issue to the file of the A.O. for adjudicating the issue afresh as per the provisions of law after affording a reasonable opportunity of being heard to the assessee.
Deduction u/s 80IB of the Act on miscellaneous receipts, sale of scrap, miscellaneous sales/processing charges - HELD THAT:- We set aside the issue relating to the sale of scrap to the file of the A.O. The A.O. is directed to decide the issue afresh in the light of direction given in A.Y. 2008-09. In so far as the other receipts are concerned, respectfully following the decision of the Tribunal in A.Y. 2008-09, the A.O. is directed to allow the claim of deduction u/s 80IB of the Act. Ground No. 3 is accordingly allowed in part for statistical purpose.
Adjustment to value of opening stock in A.Y. 2010-11 in consonance with the adjusted valuation of closing stock in A.Y. 2009-10 - HELD THAT:- The fact of this issue is that the A.O. has enhanced the closing stock of A.Y. 2009-10 which was not contested by the assessee. The only point raised by the assessee was that corresponding effect should be given to the opening stock of A.Y. 2010-11 which the ld. CIT(A) directed to the A.O. We do not find any error or infirmity in this direction of the ld. CIT(A) as the value of the closing stock of one year has to be taken as the value of opening stock of the immediately succeeding year. This ground is accordingly dismissed.
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2014 (9) TMI 1268
Quashing the criminal proceeding following the settlement between the parties - Financial Fraud with Bank - Onus on superior court to proceed to analyse the factual score - Exercise of inherent jurisdiction bestowed upon it Under Section 482 of the Code of Criminal Procedure or Under Article 226 of the Constitution of India, to quash the criminal proceeding solely on the ground that the parties have entered into a settlement and, therefore, the continuance of the criminal proceeding would be an exercise in futility, or the substantial cause of justice warrants such quashment to make the parties free from unnecessary litigation with the assumed motto of not loading the system with unfruitful prosecution.
HELD THAT:- It is not a simple case where an accused has borrowed money from the bank and diverted it somewhere else and, thereafter, paid the amount. It does not fresco a situation where there is dealing between a private financial institution and an accused, and after initiation of the criminal proceedings he pays the sum and gets the controversy settled. The expose' of facts tells a different story. As submitted by the learned Counsel for CBI the manner in which the letters of credits were issued and the funds were siphoned has a foundation in criminal law. Learned Counsel would submit that it does not depict a case which has overwhelmingly and predominantingly civil flavour. The intrinsic character is different. Emphasis is laid on the creation of fictitious companies.
In this context, we may usefully refer to a two-Judge Bench decision in Central Bureau of Investigation v. Jagjit Singh [2013 (10) TMI 1427 - SUPREME COURT] wherein the court being moved by the CBI had overturned the order of the High Court quashing the criminal proceeding and in that backdrop had taken note of the fact that accused persons had dishonestly induced delivery of the property of the bank and had used forged documents as genuine.
We are in respectful agreement with the aforesaid view. Be it stated, that availing of money from a nationalized bank in the manner, as alleged by the investigating agency, vividly exposits fiscal impurity and, in a way, financial fraud.
The ultimate victim is the collective. It creates a hazard in the financial interest of the society. The gravity of the offence creates a dent in the economic spine of the nation. The cleverness which has been skillfully contrived, if the allegations are true, has a serious consequence. A crime of this nature, in our view, would definitely fall in the category of offences which travel far ahead of personal or private wrong.
It has the potentiality to usher in economic crisis. Its implications have its own seriousness, for it creates a concavity in the solemnity that is expected in financial transactions. It is not such a case where one can pay the amount and obtain a "no due certificate" and enjoy the benefit of quashing of the criminal proceeding on the hypostasis that nothing more remains to be done.
The collective interest of which the Court is the guardian cannot be a silent or a mute spectator to allow the proceedings to be withdrawn, or for that matter yield to the ingenuous dexterity of the accused persons to invoke the jurisdiction Under Article 226 of the Constitution or Under Section 482 of the Code and quash the proceeding. It is not legally permissible.
Ex consequenti, the appeal is allowed, and the order passed by the High Court is set aside.
The trial shall proceed in accordance with law
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2014 (9) TMI 1267
Deduction u/s 80-IA - Interest Income from employees on advances, Equipment Hire charges, Crane Hire charges, Ammonia Tank Wagon Hire Charges AND Interest Income from Banks and Financial institutions - HELD THAT:- The issue stands decided by this Court against the appellant-assessee in favour of the revenue in 2013 (10) TMI 1036 - DELHI HIGH COURT] and [2012 (4) TMI 454 - DELHI HIGH COURT]. The aforesaid factual position and that the amounts/income mentioned in Serial No. (i) to (v) are covered by the said decisions, is accepted by the counsel for the appellant- assessee, who states that appeals are preferred and pending before the Supreme Court. Following the aforesaid orders, the present appeal in respect of Serial Nos. (i) to (v) has to be dismissed and is accordingly so ordered.
Interest income earned by the Appellant from investment deposit under Section 32AB of the Act in IDBI Bank - The appellant-assessee had deposited certain amounts in the account maintained under Section 32-AB of the Act with the Development Bank. The deposits so made were out of the sale proceeds i.e. income chargeable under the head Profits and gains of business or profession.
Interest was earned on the said deposits and the appellant-assessee claims that the interest earned should be included in the income derived from the industrial undertaking and accordingly was eligible for deduction under Section 80-IA - Section 80-IA of the Act does not apply and cover income in the nature of profits and gains of business or profession but is restricted only to income derived from an industrial undertaking after a certain date etc. The expression derived from refers to the first or the immediate cause/source of income earned, which in the present case would be the deposits in the bank and interest paid by the said bank and not the industrial undertaking. The aforesaid interest income, therefore, cannot be treated as income derived from the industrial undertaking covered under Section 80IA - Tribunal has rightly relied upon the decision of the Supreme Court in CIT Vs. Pandian Chemicals Ltd [2003 (4) TMI 3 - SUPREME COURT] in which it has been held that the word derived from is narrower than the word attributable to and the earlier term should be interpreted as something which has direct and immediate first source nexus with the industrial undertaking.
We are not inclined to issue notice on the Serial No. (vi). The appeal is accordingly dismissed in limine.
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2014 (9) TMI 1266
Disallowance u/s 14A read with rule 8D - disallowance made by the assessee suo-motto - HELD THAT:- The assessee claims that only net interest should be taken into account, while computing the disallowance u/s 8D(ii) of the IT Act. In the interest of justice and in view of the facts of the case, we restore this issue back to the file of AO for the limited purpose of determining the disallowance u/s 14A read with Rule 8D of the IT Rules and the computation would be worked out after verifying the claim of the assessee of netting of interest expenditure. Disallowance under Rule 8D(iii) of the IT Rules needs to be verified and we restore this issue also to the AO. Appeal are allowed for statistical purposes.
Disallowance of interest on debit balance in the account of one of the partners - disallowance of interest being attributable to the negative balance of the partner, where cumulative balance of the other partners alongwith the partner having debit balance were to be considered in order to compute the disallowance under section 36(1)(iii) - HELD THAT:- The facts of the present case are identical to the facts before in Tex Designers [2014 (6) TMI 1067 - ITAT CHANDIGARH] and following the parity of reasoning, we hold that where the cumulative balance of the partner at the close of the year were on the credit side, there is no merit in any disallowance on account of interest being attributable to the debit balance of one of the partner - we direct the AO to delete the disallowance. - Decided in favour of assessee.
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2014 (9) TMI 1265
Belated payment of employees’ contribution to PF and ESI in contravention of the provisions of section 36(1)(va) -whether the employees’ contribution towards PF and ESI paid after the statutory due dates but deposited before the due date of filing of the return prescribed u/s.139(1) is an allowable expenditure or not? - HELD THAT:- There is no dispute to the fact that the assessee in the instant case has deposited the employees’ contribution to PF and ESI before the due date of filing of the return of income although the same were deposited after the due date prescribed under the relevant Act.
As in the case of CIT Vs. Hindustan Organics Chemical Ltd. [2014 (7) TMI 477 - BOMBAY HIGH COURT] are consistently taking the view that employees’ contribution to PF and ESI, if paid on or before the due date of filing of the return of income, is an allowable deduction. Since the assessee in the instant case has admittedly deposited the employees’ contribution to PF and ESI before the due date of filing of the return, a fact submitted before the AO as well as CIT(A) and not controverted by the revenue, therefore, we are of the considered opinion that no disallowance on account of such delayed payment is called for.
We find no infirmity in the order of the CIT(A) deleting the disallowance made by the Assessing Officer on account of delayed payment of employees’ contribution to PF & ESI. We accordingly uphold the same. The grounds raised by the Revenue are accordingly dismissed.
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2014 (9) TMI 1264
Permission to travel abroad - treatment of disease - stem cell therapy, which is not available in India - HELD THAT:- The petitioner/applicant is facing trial under the Money Laundering Act and the trial is in progress. Since the petitioner/ applicant is suffering from a serious ailment and the Stem Cell therapy to treat the aforesaid disease is not available in our country, we permit the petitioner/applicant to go to Singapore where the said Stem Cell therapy is available with the conditions imposed.
Application disposed off.
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2014 (9) TMI 1263
Gain on sale of agricultural land - nature of land - business income or long term capital gains as exempt from tax - HELD THAT:- We are in agreement with the inference drawn by the lower authorities that assessee has failed to substantiate that any agricultural activity was genuinely carried out on the said land during the period it has been held by the assessee. Be that as it may, the aforesaid circumstances are enough to deduce that the motive of the assessee to acquire the land in question was not to undertake cultivation or any other agricultural operations on the said land. The aforesaid inference gets strengthened by the fact that other than the lands in question, there is no material to show that the assessee was holding agricultural lands in past for the purpose of undertaking agricultural activities.
We are unable to accept the plea of the assessee that the intention of the assessee to purchase the impugned agricultural lands was to undertake agricultural operations. On the contrary, the manner in which assessee has undertaken acquisition of lands, which are adjacent to each other, by way of multiple acquisitions and thereafter sold the same on proximate dates to the buyer, who is also a land developer, tantamounts to undertaking a trading activity and therefore surplus on such sale is liable to be taxed as a business income.
The factum of the assessee having bought and sold an agricultural land which does not fall within the definition of ‘capital assets’ in terms of section 2(14)(iii) of the Act does not mitigate the taxability of the surplus arising on its sale as business income because the facts and circumstances of the case show that assessee has indeed undertaken trading of agricultural lands. The activity of trading in agricultural lands as stock-in-trade definitely is assessable as business income.
We are inclined to uphold the orders of the authorities below treating the surplus on sale of land at village Pusane as a business income. - Decided against assessee.
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2014 (9) TMI 1262
Amicable family separation - binding agreement capable of specific performance - Was there a binding and concluded Family Arrangement as pleaded, one capable of specific performance? - HELD THAT:- The answer must be yes, for several reasons. The documents and events of 11th December 2009 all show so. The subsequent conduct of the parties also indicates that this is so.
Were Defendants Nos. 2 to 8 bound by this Family Arrangement? HELD THAT:- The answer must be in the affirmative. There is yet another way to envision this. What is the consequence of denying the Plaintiffs relief? - This much is clear: the affairs of the Shivanand Group are now entirely known to the Dattaraj Group. The latter seems to have appropriated to itself certain properties. The only reasons given for opposing specific performance are, as discussed, untenable and even specious. That there was no concluded agreement is not a defence capable of acceptance. The tax evasion argument is one of desperation. As to the defence by Defendants Nos. 2 to 8, perhaps the less said the better; this is nothing but subterfuge and mendacity.
The conclusion is irresistible that the Plaintiffs have made out a more than sufficient prima facie case, and have demonstrated too, that the balance of convenience is in their favour. It is self-evident that if reliefs as sought are not granted, immeasurable and irredeemable loss will be occasioned to them. The injunctions they seek, with some modifications, must be granted.
Notice of motion disposed off.
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2014 (9) TMI 1261
Deduction u/s.80IA(4) - initial assessment year for the purpose of claiming deduction u/s.80IA(4) of the Act was the first year in which the assessee made such claim after excercising the option - HELD THAT:- Quantum of deduction is to be computed after reducing the notional brought forward losses and depreciation of the eligible business even though the same might have been set off against other income in the earlier years or the year in which the assessee exercises the option contained in sub-section 80IA(2) of the Act of identifying 10 consecutive assessment years out of 15 years for which the deduction is to be availed. We find an identical issue had come up before the Pune Bench of the Tribunal in the case of Sangram Patil (2015 (2) TMI 936 - ITAT PUNE] wherein the Tribunal, following the decision of the Pune Bench of the Tribunal in the case of Serum International Ltd. (2013 (1) TMI 688 - ITAT PUNE] has decided the issue in favour of the assessee
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2014 (9) TMI 1260
Interim stay of the operation of the Departmental Promotion Committee (DPC) recommendations, for promotion to the post of Principal Commissioner of Income Tax - HELD THAT:- Though this Court would not wish to comment on the matter, the merits of which are to be finally adjudicated, at the same time, the impugned order discloses that till date, the DPC recommendations have not been acted upon. The order also states that the recommendations were in the process of being sent by the UPSC to the Central Government.
Having regard to the nature of the matter and the specific circular of 23.05.2001, coupled with the fact that the Finance Act in the present instance endorsed the creation of the post of Principal Commissioner of Income Tax with effect from 01.06.2013, we are of the opinion that the Central Government should not take any final decision, or at least go ahead and make any appointment pursuant to the recommendations of the impugned DPC during the pendency of the proceedings before the CAT At the same time, we are of the opinion that having regard to the matter and the nature of the submissions made, the CAT should endeavour to complete the hearing and render its decision at the earliest convenience, preferably within eight weeks from today.
Both the parties are directed to ensure full cooperation in this regard. The parties shall be present before the CAT on 09.10.2014, for directions. It is informed by the parties that the matter is listed before the CAT today (29.09.2014) afternoon at 02.30 PM. This order shall be communicated by the CAT to the petitioners as well as learned counsel for the respondents, for appropriate action. W.P stands disposed of with the above directions.
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2014 (9) TMI 1259
Distribution of the sale proceeds of the assets of the company under liquidation - Direction to return the amounts received - priority over mortgage of the same property - Application of insolvency rules in winding up of insolvent companies - Section 17 of the Central Sales Tax Act, 1956, pari materia to the provisions of Section 178 of the Income Tax Act - HELD THAT:- The bulk of the dues claimed by the State applicant is under the Central Sales Tax Act to the tune of Rs. 37,24,377.30 plus interest thereon and a lesser amount of Rs. 1,40,576.68 under the Bihar Finance Act, 1981. The dues relate to the period starting from the financial year 1993-94 till 1996-97 for which certificate cases were filed in the year 2000 and 2001 by the Sales Tax Department.
So far as the dues under the Central Sales Tax Act are concerned, the State-applicant essentially relies upon the decision of the Apex Court in IMPERIAL CHIT FUNDS (P.) LTD. VERSUS INCOME-TAX OFFICER [1996 (3) TMI 397 - SUPREME COURT]. What was held in the said decision was that the provision of Section 178 of the Income Tax Act, which is pari materia with the provision of Section 17 of the Central Sales Tax Act, 1956, goes beyond the provisions of Section 530(1)(a) of the Companies Act.
It is evident that the question of setting apart any amount would only arise out of the sale of any assets which are not the asset of secured creditor who has not relinquished the security. Thus it is no part of the duty of the O.L. to set apart any amount realized out of the assets which are the security of a secured creditor who has not relinquished the security and proceeded to realize the same. In such case the role of the O.L. is only to see that the pari passu charge of the workmen on such assets to be realized by the secured creditors are protected for the purpose of realizing the workmen’s dues -
In the present winding-up proceedings it is evident that the secured creditors have not relinquished their security but have proceeded to realize the same under the aegis of the Liquidator who was acting essentially for protecting the interest of the workmen and for recovery of the expenses for the preservation of the said secured assets. It is thus evident that the secured creditors in terms of the provisions of the Companies Act had merely obtained proportionate interest in the security and neither Section 17 of the Central Sales Tax Act nor Section 530(1)(a) of the Companies Act has the effect of overriding the interest of the secured creditors and the workmen in terms of Section 529A read with Section 529 of the Companies Act over such secured assets.
This Court does not find any force in the submission of learned counsel for the State-applicant - Application dismissed.
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2014 (9) TMI 1258
Fixation and estimation of turn over of purchase and sale of rice - levy of tax on purchase as well as on the alleged sale of rice without any observation for giving benefit of Section 13 of the Act - HELD THAT:- The turnover of purchase so fixed comes to about 2.5 times of the amount mentioned in the loose parcha which is proportionate to the period for which the business has been done by the applicant. Thus, there is no substance in the submissions of the learned counsel for the applicant, that the purchase turn over determined by the authorities is excessive - As per Section 4 of the Act, the tax is payable on the taxable turnover of sale of goods under the Act. Rice is a commodity which is specified in Entry-52 of Part-A of Schedule-II of the Act, and is liable to tax at the rate of 4%.
Section 13 of the Act, provides that a credit of the amount as input tax credit to the extent of full amount of tax on purchases shall be allowed, if the purchased goods are resold. Since, the turnover of purchase and sale in respect of the same rice has been determined and as such if the applicant first deposits the amount of tax determined on purchases of goods then in that event, an input tax credit may be allowed to him against the liability to tax on the sale turnover of such rice. This credit shall be available to the applicant as per provisions of Section 13 read with Section 2(p) of the Act.
This revision is partly allowed - the matter is remanded back to the assessing authority to recompute the amount of tax and raise a fresh demand against the applicant.
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2014 (9) TMI 1257
Review petition filed by a convict whose death penalty is affirmed by this Court is required to be heard in open Court but cannot be decided by circulation - Extinguishment of life - Whether Article 21 is the sole repository of the constitutional guarantee against the deprivation of life? - whether it is sufficient for the State to merely prescribe a procedure for the deprivation of life by a law, or whether such a law is required to comply with certain other constitutional requirements? -
As per Jasti Chelameswar, J,
HELD THAT:- Article 137 does not confer any right to seek review of any judgment of this Court in any person. On the other hand, it only recognizes the authority of this Court to review its own judgments. It is a settled position of law that the Courts of limited jurisdiction don't have any inherent power of review. Though this Court is the apex constitutional court with plenary jurisdiction, the makers of the Constitution thought it fit to expressly confer such a power on this Court as they were aware that if an error creeps into the judgment of this Court, there is no way of correcting it. Therefore, perhaps they did not want to leave scope for any doubt regarding the jurisdiction of this Court to review its judgments in appropriate cases.
Prior to the amendment of Order XL of the Supreme Court Rules in 1978, which was the subject matter of challenge in the case of PN. ESWARA IYER VERSUS THE REGISTRAR, SUPREME COURT OF INDIA [1980 (2) TMI 258 - SUPREME COURT], this Court granted oral hearings even at the stage of review. It was by the amendment that the oral hearings were eliminated at the review stage. As explained by Eswara Iyer's case, such an amendment was necessitated as a result of unwarranted "review baby" boom. This Court, in exercise of its authority Under Article 145 as a part of the Court management strategy, thought it fit to eliminate the oral hearings at the review stage while preserving the discretion in the Bench considering a review application to grant an oral hearing in an appropriate case.
There are no reason to take a different view -whether the "developments" subsequent to Eswara Iyer's case, either in law or practice of this Court, demand a reconsideration of the rule, should be left to the Court's jurisdiction Under Article 145.
As per Rohinton Fali Nariman, J,
HELD THAT:- Deflecting a little from the death penalty cases, we deem it necessary to make certain general comments on sentencing, as they are relevant to the context. Crime and punishment are two sides of the same coin. Punishment must fit the crime. The notion of 'Just deserts' or a sentence proportionate to the offender's culpability was the principle which, by passage of time, became applicable to criminal jurisprudence. It is not out of place to mention that in all of recorded history, there has never been a time when crime and punishment have not been the subject of debate and difference of opinion. There are no statutory guidelines to regulate punishment. Therefore, in practice, there is much variance in the matter of sentencing. In many countries, there are laws prescribing sentencing guidelines, but there is no statutory sentencing policy in India. The Indian Penal Code, prescribes only the maximum punishments for offences and in some cases minimum punishment is also prescribed.
Though, it is not necessary to dwell upon this aspect elaborately, at the same time, it needs to be emphasised that when on the same set of facts, one judicial mind can come to the conclusion that the circumstances do not warrant the death penalty, whereas another may feel it to be a fit case fully justifying the death penalty, we feel that when a convict who has suffered the sentence of death and files a review petition, the necessity of oral hearing in such a review petition becomes an integral part of "reasonable procedure".
The validity of no oral hearing rule in review petitions, generally, has been upheld in PN. ESWARA IYER VERSUS THE REGISTRAR, SUPREME COURT OF INDIA [1980 (2) TMI 258 - SUPREME COURT] which is a binding precedent. Review petitions arising out of death sentence cases is carved out as a separate category as oral hearing in such review petitions is found to be mandated by Article 21 - when it is a question of life and death of a person, even a remote chance of deviating from such a decision while exercising the review jurisdiction, would justify oral hearing in a review petition.
It is not necessary to refer to the various sections of the Code of Criminal Procedure and the Penal Code argued before us. Equally, Article 20(1) has no manner of application as the writ Petitioner is not being subjected to a penalty greater than that which might have been inflicted under the law in force at the time of commission of the offence.
This petition is therefore dismissed.
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2014 (9) TMI 1256
Nature or receipt - Revenue Receipt versus Capital Receipt - taxability of non-compete fees - non-compete agreement incorporates a restrictive covenant on the right of the Assessee to carry on his activity of development of software - receipt in the hands of the Assessee was certainly a capital receipt - HELD THAT:- After going through the record and the impugned judgment of the High Court, we do not find any error therein. The appeals are dismissed.
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