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Showing 21 to 40 of 1281 Records
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2014 (9) TMI 1268 - SUPREME COURT
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 - DELHI HIGH COURT
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 - ITAT CHANDIGARH
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 - ITAT PUNE
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 - SUPREME COURT
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 - ITAT PUNE
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 - BOMBAY HIGH COURT
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 - ITAT PUNE
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 - DELHI HIGH COURT
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 - PATNA HIGH COURT
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 - ALLAHABAD HIGH COURT
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 - SUPREME COURT
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 - SUPREME COURT
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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2014 (9) TMI 1255 - ITAT HYDERABAD
Disallowance u/s 14A r.w.r. 8D - borrowed funds were also utilised partly by the assessee for making tax free investments and the disallowance to be made u/s 14A was required to be computed as per clause (ii) and (iii) of Rule 8D(2) - CIT(A) held that the said disallowance on account of interest made by the Assessing Officer based on the quantum of investment was correct and the same was accordingly confirmed by the learned CIT(A) - HELD THAT:- At the time of hearing before us, the learned Departmental Representative has not been able to rebut or controvert the findings recorded by the learned CIT(A), which formed the basis of relief allowed by him to the assessee. We, therefore, find no justifiable reason to interfere with the impugned orders of the learned CIT(A) in directing the Assessing Officer not to consider the interest paid by the assessee on the loans borrowed after the financial year 2005-06 and also the interest directly relating to any other taxable income, while computing the disallowance under Rule 8D(2). The same are accordingly upheld on this issue and the appeals of the Revenue are dismissed.
Mandation of recording satisfaction - Correctness of the claim of the assessee of having not incurred any expenditure for earning the exempt income - No details were filed by it showing the basis for working out the disallowance at ₹ 1-lakh offered under S.14A. A perusal of the assessment order also shows that the issue of other expenses indirectly attributable to the earning of exempt income was not separately discussed by the Assessing Officer and there was no finding given by him on this aspect. Although the learned CIT(A) has observed in his impugned order that dissatisfaction was recorded by the Assessing Officer as regards the correctness of the claim of the assessee of having not incurred any expenditure for earning the exempt income, we find that there is no such finding specifically recorded by the Assessing Officer in the assessment order.
As already noted by us, the assessee has also taken contradictory stand on this issue and in the absence of any details filed by it, giving the basis of disallowance of ₹ 1 lakh offered in the computation of total income, there was no occasion for the Assessing Officer to record his satisfaction or dissatisfaction about the correctness of the claim of the assessee on this aspect. Having regard to all these facts of the case, clearly borne out from the record, we are of the view that it would be fair and proper to restore this matter to the file of the Assessing Officer for deciding the same afresh in accordance with law, after giving the assessee a proper and sufficient opportunity of being heard. Accordingly, the impugned order of the learned CIT(A) on this issue is set aside and the matter is restored to the file of the Assessing Officer for deciding the issue in relation to the disallowance to be made under S.14A on account of other expenses as per Rule 8D(2)(iii) afresh. The appeals of the assessee are accordingly treated as allowed for statistical purposes.
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2014 (9) TMI 1254 - ITAT BANGALORE
Profit on sale of land - assessable under the head ‘capital gains’ OR 'profits and gains of business or profession’ - HELD THAT:- From the recitals in the letter, it is not clear as to whether the assessee was really carrying on the activity of adventure in the nature of trade or that these properties were considered as trading assets by the assessee. CIT(A) has clearly held that these lands were held by the assessee as agricultural land for a period of more than 3 year - the Tribunal by order [2011 (3) TMI 1821 - ITAT BANGALORE] in the assessee’s own case in similar set of facts for assessment year 2006-07 held the income from the sale of land to be capital gains and not income from business or profession. Copy of the Tribunal’s order for the earlier assessment year 2006-07 is also filed before us and it is evident there-from that the Tribunal has considered the activities of the assessee of improving the land by leveling the land and making plots etc., and has held that it is not an activity in the nature of adventure in trade
Since the facts of the case before us are similar to the facts in the assessee’s own case for earlier assessment year, respectfully following the decision of the co-ordinate Bench to which one of us i.e. the Judicial Member is the signatory, we uphold the findings of the CIT(A) that income from sale of land is to be taxed as ‘income from capital gains’. The Revenue’s ground of appeal is accordingly rejected.
Addition on account of suppression of sale consideration of the land - HELD THAT:- AO has made addition only on the basis of the statement of Shri Purushotham Reddy recorded during the course of search that the assessee has received sale consideration at the rate of ₹ 1224/- per sq.ft. as against ₹ 975/- per sq.ft. claimed by the assessee. Except for the statement of Shri Purushotham Reddy, there has been no evidence brought on record to show that the sale consideration was at the rate of ₹ 1224/- per sq.ft.. In the absence of any material on record to substantiate the statement recorded during the course of search of the third party, we are not inclined to accept the contention of the Revenue that there is suppression of sale consideration by the assessee. We, therefore, do not see any reason to interfere with the order of the CIT(A) on this issue. This ground of appeal is also rejected.
Disallowance u/s 40(a)(ia) - non-deduction of tax at source before making payment to certain parties - AO has disallowed the sum on the ground that the assessee has not deducted tax before making payment to various parties set out in para.13 of the assessment order - HELD THAT:- We find that the CIT(A) has also recorded a finding that no TDS has been deducted while making payment but that the genuineness of the expenditure has not been doubted by the AO and that there is no evidence on record to suggest that this expenditure was not incurred. However, since we have already held that income from sale of land is to be taxed as ‘capital gains’ and not as ‘income from business or profession’, the provisions of sec.40(a)(ia) are not applicable. Therefore, this ground of appeal of the Revenue is also rejected.
Expenditure allegedly incurred by the assessee towards the construction of the compound wall and paid to G.K.Associates - HELD THAT:- We find that the sale of land had taken place in March 2007. Up to the date of sale, a sum of ₹ 49,79,320/- was made to GK Associates. Out of this, except for a sum of ₹ 10,42,929/- the balance was paid in cash. The subsequent payments are in the months of April, June, July and October 2010 and are all by account payee cheques. As rightly held by the CIT(A) and argued by the learned Departmental Representative, just because certain account payee cheques have been made to one person, it does not mean that these are attributable to construction of compound wall or that they are relatable to the improvement of land.
The assessee has to explain with necessary evidence as to the reasons why payments were made much later to the sale of land. No details were furnished either before the AO or the CIT(A), nor did the authorities below examine as to whether there was a compound wall constructed by GK Associates during the relevant period and whether the payment to GK Associates as claimed by the assessee was towards such construction of the compound wall. Therefore, in the interests of justice, we deem it fit and proper to remit this issue to the file of the AO with a direction to examine and verify whether compound wall was in fact constructed around the schedule land and reasons for payments made subsequent to the date of sale of land and allow the expenditure incurred for such construction of compound wall, if it is found that compound wall was in fact, constructed by the GK Associates at the behest of the assessee - cross objection of the assessee is allowed for statistical purposes.
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2014 (9) TMI 1253 - KERALA HIGH COURT
Preventive Detention order - petitioners argued that challenge to preventive detention order under KAAPA can be done even at pre-execution stage - HELD THAT:- In the case in hand, the definite plea is that the second petitioner is mentally ill. It would be unreasonable to keep him out without even providing him medical help, if he needs treatment in that regard. This is all the more so because, if the second petitioner is shown to be one who cann - ot be tried owing to any disability in that regard, he has to be presented for treatment by the competent authority and could be put to trial only on being satisfied, on due certification by such authority that he is fit for trial - there is no statutory or public duty in any of the functionaries under KAAPA to consider such a representation, though the Government being the ultimate authority may, in its wisdom, if it desires so, consider that representation and act on it, particularly because under S. 13 of KAAPA, the Government has fairly wide powers in relation to such matters. But, let the Government remember that the Constitution and the laws are the supreme because they form the base cream for governance in terms of the collective will and declaration by "We, the People of India".
This Writ Petition is dismissed.
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2014 (9) TMI 1252 - ANDHRA PRADESH HIGH COURT
Seeking to grant injunction - whether there is a ‘clear fraud’ of which the 2nd respondent has noticed and the fraud of the 1st respondent from which it seeks to benefit and the other exception whether there are any ‘special equities’ in favour of granting injunction? - HELD THAT:- There is complete denial by the 1st respondent as to the allegations levelled against it touching the alleged fraud on its part by attributing total lapses on the part of the appellant that had compelled the 1st respondent to get the balance of work done through the third party – contractors with the consent of the appellant.
The vital aspect that touches the conduct of the appellant is, according consent to the 1st respondent to make payments directly to the third party-contractor by getting the work carried out which was left over by the appellant by even demobilising its resources from the site. It is not as though, a mere consent by the appellant was given for getting the balance work executed through other sub-contractor, which the appellant was supposed to execute, but even the payments were made by the 1st respondent, through the appellant. This circumstance attains greater significance since it affects vitally not only the fraud alleged by the appellant, but even it disfavours the appellant in proving the ‘irretrievable injury’ or ‘irretrievable injustice’ and further disfavours the appellant from seeking equitable relief of injunction based on ‘special equities’. The attempt made by the appellant to take shelter under Clause – 8.1 relating to sub-contracting the works, gets completely condemned when the purport of the said sub-clause is examined - the attempt of the appellant to deprive advantage under the said clause, in our view, is a concrete attempt to take undue advantage of the said clause to wriggle itself out of the obligations cast on it and consequences thereof.
The case of the appellant neither falls in the first exception nor in the second exception nor the appellant is successful in establishing ‘special equities’ favouring it to seek the equitable relief of injunction in these two appeals.
Concerning the other allegations touching the outstanding amounts to be paid by the appellant at ₹ 28.19 crores, as ad-hoc advances were made by the 1st respondent, with the object of getting the work executed within the time frame or even earlier also, stands adverse to the case of the appellant. No doubt, the appellant has initially stated that the loss it sustained was to the tune of ₹ 175.00 crores and in its reply affidavit, it has expanded the alleged quantified loss to the tune of ₹ 421.80 crores, but these aspects have to be gone into by the arbitral Tribunal. Even the other aspects which the appellant has pressed into service constitute the subject before the arbitral Tribunal.
Thus, the appellant failed to establish not only the ground of ‘established fraud’, but also the ground of ‘special equities’ in its favour. Therefore, the common order under challenge cannot be withheld, as such, while confirming the same, appeal dismissed.
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2014 (9) TMI 1251 - GUJARAT HIGH COURT
Continuation of stay till final hearing of appeal - Service of notice - HELD THAT:- Since the main appeal is to be listed for final hearing on 30th September, 2014, the stay granted by the learned Single Judge vide order dated 28.8.2014 shall continue till the final hearing of the appeal. However, as recorded by the learned Company Judge in paragraph-46D of the impugned judgment, it shall be open for the Official Liquidator to disburse the dues of the workers after due verification.
However, instead of disbursing the dues of the workers out of ₹ 14 crores deposited by the first respondent herein, ₹ 7 crores each shall be disbursed from the amount deposited by the appellant and the opponent No.1 - Since the opponent No.1 has deposited ₹ 14 crores with the Registry, the entire amount shall be transferred to the Official Liquidator, out of which, ₹ 7 crores shall be disbursed towards the dues of the workers and the remaining ₹ 7 crores shall be kept in a fixed deposit in terms of the directions issued by the learned Single Judge.
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2014 (9) TMI 1250 - MADRAS HIGH COURT
Rejection of request for appointment to the post of Junior Assistant /Bill Collector - HELD THAT:- It is to be noted that appointment on compassionate ground is based upon rules and regulations governing the same. In other words, the appellant cannot seek, as a matter of right, that he should be appointed in a particular post. Admittedly, the post of Record Clerk was vacant at the relevant point of time and the appellant was appointed to the said post. Having voluntarily accepted such appointment, the appellant is estopped from making a higher claim without any legal basis. Merely because others have been given the benefit of appointment to other post, the appellant cannot claim the same, as a matter of right. In such view of the matter, the stand taken by the learned counsel for the appellant cuts no ice.
Appeal dismissed.
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2014 (9) TMI 1249 - ITAT PUNE
Deduction u/s 80IB - sale of scrap was eligible for the deduction u/s. 80IB for the Pimpri Unit-II and Goa unit of the assessee company - AO disallowed the claim of the assessee for deduction u/s. 80IB in respect of the Pimpri Unit-II holding that the said Unit was not a new independent undertaking - HELD THAT:- It was the common point between the parties that the issue relating to eligibility of sale of scrap for Sec. 80IB benefits is no longer res-integra but has been decided by the Tribunal in the assessee’s own case for assessment year 2002-03 [2011 (7) TMI 1153 - ITAT PUNE] in favour of the assessee. It was also a common point between the parties that the said precedent continues to hold the field as it has not been altered by any higher authority. In view of the aforesaid precedent we uphold the stand of the CIT(A) and as a result the Grounds of appeal nos. 1 and 2 raised by the Revenue stand dismissed.
Pre-payment of deferred sales tax loan liability - assessee has availed of the deferred sales tax scheme of the Govt. of Maharashtra in earlier years - HELD THAT:- Ostensibly, the issue which was raised by the assessee for the first time before the CIT(A) involved a point of law and the necessary facts to adjudicate the same, were already on record. In other words, the adjudication of the new claim sought to be raised by the assessee for the first time before the CIT(A) did not require any fresh investigation of facts. Therefore, in terms of the judgment in the case of National Thermal Power Co. Ltd [1996 (12) TMI 7 - SUPREME COURT] the CIT(A) made no mistake in admitting such Additional Ground of appeal. It is pertinent to note that before adjudicating on the Additional Ground of appeal, the CIT(A) duly called for the comments of the Assessing Officer, and only after considering the comments, he has admitted the additional Grounds of Appeal for all the above reasons, the action of the CIT(A) is hereby affirmed. In so far as the merits of the claim is concerned, it was a common point between the parties that the controversy is to be adjudicated in the light of the decision of the Special Bench of the Tribunal in the case of Sulzer India Limited [2010 (11) TMI 728 - ITAT, MUMBAI] - Decided against revenue.
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