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Showing 321 to 340 of 863 Records

• 2008 (2) TMI 648
  
  Issues Involved:
  1. Deletion of addition in respect of 8,000 bonus shares of Nestle India Ltd. received by the assessee as a gift.
  2. Deduction under section 54F of the Income Tax Act.
  
  Issue 1: Deletion of Addition in Respect of 8,000 Bonus Shares of Nestle India Ltd.

  The revenue's appeal questioned whether the CIT(A) was justified in deleting the addition of Rs. 31,96,258 made on account of unexplained cash credit and Rs. 8,61,900 as concealed investment. The Assessing Officer (AO) disallowed the claim of gifts of 8,000 shares from Sri Jiwan Ram Marda and Sri Sushil Marda, asserting that the shares were not transferred to the assessee's demat account and the donors did not hold sufficient shares. The AO added the sale proceeds of 6,300 shares as income from other sources under section 68 and the value of the remaining 1,700 shares as undisclosed investment under section 69.

  The CIT(A) deleted these additions, noting that the shares were transferred to the broker's demat account for sale and the proceeds were credited to the assessee's bank account. The CIT(A) emphasized that the donors were the actual holders of the shares, and the source of the shares was explained.

  The Tribunal upheld the CIT(A)'s decision, stating that the gift was valid even if the shares were not registered in the assessee's name. It referenced the case of Sheila Devi Chamria v. Tara Chand Sareogi, where it was held that a gift of shares is complete when handed over with a blank transfer form, and non-recording in the company's books does not invalidate the gift. The Tribunal found the donors had sufficient shares and the transfer to the broker's account substantiated the gift. Thus, the addition under section 68 and 69 was not justified, and the deletion of Rs. 31,96,258 and Rs. 8,61,900 was sustained.

  Issue 2: Deduction under Section 54F of the Income Tax Act

  The assessee claimed a deduction under section 54F for the investment in a new residential house property. The AO disallowed the claim, arguing that the assessee could not produce the original map of the property and that purchasing part of a residential house does not qualify for exemption under section 54F. The CIT(A) partially allowed the deduction, granting Rs. 4,80,711 but disallowing Rs. 12,00,000, reasoning that the latter amount was financed by a bank loan, and only the net consideration invested by the assessee should be considered for exemption.

  The Tribunal disagreed with the CIT(A), holding that section 54F does not require the net consideration to be reinvested directly. It cited the case of ITO v. K.C. Gopalan, which allowed exemption under section 54 even if the sale consideration was not directly used for purchasing the new property. The Tribunal concluded that the assessee was entitled to the full exemption of Rs. 16,80,711, as the investment in the new house was made within the stipulated period, regardless of the source of funds. Thus, the Tribunal allowed the assessee's appeal and dismissed the department's appeal on this ground.

  Conclusion:

  The Tribunal dismissed the revenue's appeal and allowed the assessee's appeal, confirming the deletion of additions related to the gifted shares and granting the full deduction under section 54F.

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• 2008 (2) TMI 647
  

  Contention of the department is that applicants’ work (which includes execution of civil work, false ceiling work, carpentry work, painting and plumbing work, electrical and any other interior related work as per the plan and design provided by architects or consultants of the customers) would amount to service relating to beautification of spaces and therefore is taxable under category of “interior decorators” - Prima facie contention of revenue is not correct so stay application is allowed

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• 2008 (2) TMI 646
  

  Demand –Demand raised on the goods lying in the warehouse on the date of applicability of duty as per the provision of section 15(1)(b) of the Act but assessee contended that goods cleared for the home consumption, so the said provision not applicable – Demand rejected and interest payment would be decided by the custom authorities

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• 2008 (2) TMI 645
  

  MRP based valuation under central excise - Section 4A - industrial supply or not - use for shopping malls, large residential complexes, commercial buildings etc. - “Pre-packed commodity” - petitioners submitted that the switchgear products manufactured by the petitioners are not a “commodity in the packaged form” within the meaning of Act and the Rules. Packaging is done only for the sake of convenience and for safe transportation and protection during storage and handling. The nature of the switchgear products manufactured by the petitioners is that they are not required to be packed before they can be sold and goods are not pre-packed commodity as they do not have pre-determined value at the time when they are placed in the package - in the case of Whirlpool India Ltd. (2007 -TMI - 2207 - Supreme Court of India), held that a refrigerator which is a single unit which is packed in polythene cover, thermocol etc. and placed in hard board cartons is a pre-packed commodity under the old rule considering the language of the rule as substituted, there can be no escape from holding that the goods seized from the stockists of the petitioners are a pre-packed commodity. contention of the petitioners rejected

  Industrial or institutional consumer - If the packaged commodity purchased cannot be directly installed by the Co-operative Housing Society on the ground that such user is prohibited by the Electricity Rules, that however, would only mean that a person qualified under the rules can install the same for the consumer who may have purchased the package - no prohibition on such society purchasing the product and installing it through a licensed person. They are the ultimate consumers - All such consumers whether they be institutional or industrial will also be covered by Chapter II. Even the ordinary dictionary meaning makes such a purchaser a ‘consumer’ - construing Rule 3, who are excluded are only the institutional or industrial consumers as explained in Rule 2A and that the industrial or institutional consumers in terms of the proviso to Rule 2(p) for the purpose of Chapter II are the same

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• 2008 (2) TMI 643
  

  Sub-sec (3) to Section 49A - Though the petitioners also contend that they would have to bear the burden at this stage since it would be difficult to recover from the vessel owners, no relief could be granted to the petitioners in so far as that aspect as against the first respondent in this petition - As already noticed, the tariff is fixed by the TAMP and the first respondent is only enforcing and recovering the same - However, all that can be noticed is that as per sub-sec (3) to Section 49A the Central Government has the authority in special cases to remit in whole or portion of any amount that is payable in respect of pilotage and other services - Hence alter paying the amount due to the first respondent, the petitioner may make an appropriate representation to the Central Government who shall consider the same in accordance with law and take an appropriate decision on its merits if such special circumstance is made out.

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• 2008 (2) TMI 641
  

  Tribunal was justified and/or had the jurisdiction to ignore the decision of the High Court on the ground that it does not lay down the correct principles of law on the issue involved therein. - Tribunal was right in their observations, even then what was the procedure which the Tribunal should have followed in such eventuality or not.

  Regarding jurisdiction of Tribunal. Held that:- the Tribunal was not justified in commenting upon the decision of High Court nor was justified in ignoring the decision on the ground that it does not lay down the correct principle of law on the issue involved. Decided in favour of Assessee.

  Regarding procedure followed by Tribunal. held that:- a power to overrule any decision of the High Court vests only with the Supreme Court and with the larger Bench of the same High Court. So long as the decision is not overruled, it continues to hold the field and is, therefore, binding on courts/tribunals subordinate to such High Court. decided in favour of Assessee.

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• 2008 (2) TMI 640
  

  Revocation of trust - by sole beneficiary - The respondent trust was created in the year 1981 when the sole beneficiary Mr. Nelson was a minor aged 14 years. The trust was to be operative until the beneficiary became 21 years of age and thereafter the trust property was to be transferred to the beneficiary - on becoming major - sole beneficiary revoked the trust and took over the assets and business of the trust and started carrying on business as the proprietor - Assessing Officer held that the trust is continuing business and consequently the respondent was assessed as a trust, Even though the beneficiary was also assessed in his individual capacity on the same income, the respondent - Held that: - trust otherwise created can be revoked only- (a) where all the beneficiaries are competent to contract by their consent ; (b) where the trust has been declared by a non-testamentary instrument or by word of mouth-in exercise of a power of revocation expressly reserved to the author of the trust ; or (c) where the trust is for the payment of the debts of the author of the trust, and has not been communicated to the creditors-at the pleasure of the author of the trust - sole beneficiary opted to revoke the trust in exercise of his authority under section 78 of the Trusts Act, the Department cannot insist and hold that the trust will continue in force till the duration as stated in clause 2 of the trust deed - Appeal is dismissed

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• 2008 (2) TMI 639
  
  Issues:
  Confirmation petition for sanction of the scheme of arrangement.
  
  Analysis:
  The judgment pertains to a confirmation petition for the sanction of a scheme of arrangement involving two companies, one being a deemed public company under section 43A(2) of the Indian Companies Act. The scheme involves the demerger of the business of a Cinema Hall from one company and its merger with another company. Both companies have obtained approval for the arrangement from their respective Board of Directors. The scheme has been approved by the shareholders of both companies, and it is noted that there are no creditors involved. The Court, considering the facts and circumstances, dispensed with the requirement of meetings of shareholders and creditors of both companies.
  
  The confirmation petition was advertised in newspapers as per the court's order, and the Central Government expressed no objection to the proposed scheme of arrangement. No objections were received following the advertisements. Consequently, the Court allowed the petition and approved and sanctioned the scheme of arrangement. The order directed the filing of a certified copy of the order before the Registrar of the Company within 30 days of receipt, with a formal order to follow as per the Company (Court) Rules, 1959.
  
  This judgment showcases the legal process involved in sanctioning a scheme of arrangement between companies, highlighting the importance of shareholder and creditor approval, as well as compliance with advertising and objection procedures. The Court's role in overseeing such arrangements to ensure fairness and compliance with relevant laws and regulations is evident in this case.

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• 2008 (2) TMI 638
  
  Issues:
  1. Legal representation of deceased party in a court case.
  2. Compliance with court orders post the demise of a party.
  3. Possession of premises and responsibilities of the Official Liquidator.
  
  Analysis:
  1. The judgment addresses the issue of legal representation following the death of a party to the case. The court allowed Anand Saxena, Rohit Saxena, and Smt. Priti Srivastava to be taken on record as the Legal Representatives of the deceased, Usha Saxena. This decision ensures that the legal proceedings can continue with the appropriate representation despite the demise of a party.
  
  2. The court dealt with the matter of compliance with previous court orders after the death of Usha Saxena. It was noted that the applicant was directed to furnish an undertaking, which could not be done due to Usha Saxena's demise. Subsequently, another application was filed by Usha Saxena's legal representatives to seek direction for compliance with the court's order. The judgment clarifies the steps to be taken in such a scenario to ensure the continuity and fairness of legal proceedings.
  
  3. Regarding the possession of premises and the responsibilities of the Official Liquidator, the judgment directed the Official Liquidator to vacate the premises in question and hand over possession to the legal representatives of Usha Saxena. However, this was subject to certain conditions, including the furnishing of undertakings related to indemnification against claims, waiver of rent claims, and bearing transportation charges. The judgment also specified that the security deposited with the applicant should not be claimed by the Official Liquidator, outlining the practical aspects of transferring possession and responsibilities in such cases.
  
  This comprehensive analysis of the judgment highlights the court's considerations and decisions on the legal representation of a deceased party, compliance with court orders post-demise, and the transfer of possession and responsibilities in a legal matter involving the Official Liquidator.

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• 2008 (2) TMI 637
  

  Winding up - Custody of company’s property - Held that:- The appellant is not the only secured creditor. There are several other secured creditors and also unsecured creditors. The amount realised in the sale of the assets of the Company in liquidation has to be disbursed in accordance with the provisions of the Company Court Rules. Any deposit made during the interregnum period has to necessarily be with the Official Liquidator who is holding the amount in fiduciary capacity as a trustee for the creditors and any deposit made during the interregnum period has to earn interest so as to enable the Official Liquidator to make use of the interest income for disposal of both the secured creditors and other creditors. As per the provisions of the Company Court Rules, we are not able to countenance the argument of the learned counsel to the effect that the deposit made with the appellant-Bank need not be burdened with interest. To that extent, the order of the learned Single Judge has been confirmed. In the second part of the order made by the learned Single Judge, the rate of interest has not been quantified.

  Having regard to the fact that the appellant has enjoyed the money in a sum of ₹ 4.42 crores and made use of the said amount for the banking business and having regard to the rate of interest prevailing during the relevant period, we are of the view that the rate of interest for the amount deposited with the appellant can be fixed at 12 per cent per annum from the date of deposit till it is withdrawn/adjustment is made for the share of the appellant. Such an order is passed. The Appeal is disposed of in the above terms.

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• 2008 (2) TMI 636
  

  Amalgamation - Held that:- The Board of Directors of the Applicant/Transferee-company has passed a resolution approving the Scheme of Arrangement on 17-1-2008 and the Board of Directors of all the Transferor-companies have passed separate resolutions approving the Scheme of Arrangement for amalgamation of Transferor-companies with the Transferee-company on 15-1-2008, copies of which have been filed on record. Direction to commence meetings of Shareholders, Secured and unsecured creditors

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• 2008 (2) TMI 635
  

  Amalgamation- Held that:- The applicant/transferee company and Transferor company have also filed the scheme of amalgamation and salient features of the amalgamation have been incorporated and detailed in the application.The applicant company has stated that no proceedings under sections 235 to 251 of the Act are pending against the Transferor company and Transferee company. Direction to commence meetings of Shareholders, Secured and unsecured creditors as required.

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• 2008 (2) TMI 634
  

  Winding up – Company when deemed unable to pay its debts - Held that:- Perusal of the letter dated March 21, 2002 would only show that the deputy manager of the respondent-company informed the petitioner-company that they shall resume the normal production and shall start releasing the payments against the petitioner's outstanding bills as per the understanding with the petitioner. Therefore, this letter dated March 21, 2002, is not an unambiguous and categorical admission of a specified amount due and payable by the respondent to the petitioner.

  Similarly, the balance confirmation report dated July 19, 2002, cannot also be said to be an unconditional admission of the debts by the respondent.

  According to the respondent, they have rejected some materials sup plied by the petitioner for which proper credit was not given by the petitioner. They have also filed certain letters in the additional typed set of papers to show that some materials were rejected and they asked for credit notes towards the value of the same.In such circumstances, the above company petition filed by the petitioner is misconceived and if at all the petitioner is aggrieved, they have to approach the proper forum. Also rejecting the arguments of learned counsel for the respondent that there is statutory compliance of sending the notice before filing the petition. Appeal dismissed.

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• 2008 (2) TMI 633
  

  Winding up - Held that:- Set aside the impugned order of the High Court and remit the matter to it for fresh disposal in accordance with law.

  The Company Judge proceeded with the matter and directed sale of the assets of the company in favour of the Indian Railways who had made offer of Rs. 140 crores. On 12-3-2007, IA was filed by the appellant giving details of his proposal. By the impugned order the Division Bench dismissed the appeal. Though various grounds have been urged in support of the appeal, the primary ground of challenge is that such summary disposal is indefensible particularly when the appeal is a statutory appeal.

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• 2008 (2) TMI 632
  

  Restoration of company name - Held that:- The court is satisfied with the submission made by Mr. Pahwa and since the present petition is moved within the prescribed time limit and there is no objection from any corner, the prayer made by the petitioner in the present petition is hereby granted. The petitioner is hereby directed to comply with the provisions contained in rules 93 and 94 of the Companies (Court) Rules, 1959.

  The petitioner is hereby directed to deliver certified copy of the order within 14 days from the date of the order, and on such delivery, the Registrar of Companies do, in his official name, advertise the order in the gazette of the State Government as well as issue public advertisements in the two newspapers, namely, "The Indian Express" - English daily and "Loksatta-Jansatta" - Gujarati daily, both Ahmedabad editions. For meeting with these expenses the petitioner is hereby directed to deposit a sum of ₹ 10,000 with the Registrar of Companies and further pay counsel fees which is quantified to ₹ 3,500.

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• 2008 (2) TMI 631
  
  Issues:
  1. Deletion of appellant's name in misfeasance proceedings.
  2. Acceptance of statement of affairs by Managing Director.
  3. Disposal of appeal based on the grounds presented.
  
  Issue 1 - Deletion of Appellant's Name in Misfeasance Proceedings:
  The appellant sought the deletion of their name as a respondent in the misfeasance proceedings, contending that they were not involved in the day-to-day management of the company before its liquidation, were not a director at the time of winding up, and did not participate in company meetings. The court initially refused to accept this statement without verification and granted liberty to the appellant to present all grounds. Subsequently, the Managing Director filed a statement of affairs, leading the court to drop the complaint against the appellant and others. The court found that only the second accused was responsible for the company's operations before liquidation, and the second accused took full responsibility for the company's affairs during that period.
  
  Issue 2 - Acceptance of Statement of Affairs by Managing Director:
  Following the acceptance of the statement of affairs filed by the Managing Director, the court dropped the complaint against the second accused and others. The court's decision was based on the understanding that the second accused was solely accountable for the company's management before liquidation and had assumed all responsibilities for its affairs during that time. This acceptance of the statement of affairs led to the dismissal of the case against the appellant and other accused parties.
  
  Issue 3 - Disposal of Appeal Based on Presented Grounds:
  The court, considering the circumstances of the case, allowed the appeal solely on the grounds presented. The appeal and the application were consequently disposed of, and no costs were awarded. The court set aside the previous order dated 24-8-2007 in light of the subsequent order dated 31-8-2007, emphasizing that there was no basis for further action against the appellant following the acceptance of their statement by the court.
  
  This comprehensive analysis of the judgment highlights the progression of events, the court's reasoning, and the final disposition of the appeal based on the grounds presented and the acceptance of the Managing Director's statement of affairs.

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• 2008 (2) TMI 630
  

  Winding up – Suits stayed on winding up orders - steps to resume possession of land - Held that:- On the principle of promissory estoppel, the Government cannot be permitted to resume the land while the Andhra Pradesh Refractories Ltd., is in liquidation. If such permission is granted, all the banks/financial institutions would not be able to recover their amounts either fully or in part. The Government in essence claims equity while purporting to enforce the resumption clause, and therefore, they are bound to do equity to the mortgages. Ignoring the interests of the mortgages/chargeholders, in whose favour the land is mortgaged, the Government cannot be permitted to resume the land.

  In the result for the above reasons, these applications must fail. The company applications are accordingly dismissed

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• 2008 (2) TMI 629
  
  Issues:
  1. Whether a writ of mandamus can be issued to direct an inquiry into price manipulation/inside trading.
  2. Whether SEBI is obligated to investigate complaints of price manipulation.
  3. Whether the court can entertain public interest litigations (PILs) regarding stock market matters.
  
  Analysis:
  Issue 1: The petitioner sought a writ of mandamus to direct an inquiry into price manipulation/inside trading of a company's scrip. The petitioner, a small investor, alleged losses due to fluctuating share prices and complained to SEBI. However, the court cited a previous judgment stating that individual shareholders cannot compel SEBI to investigate stock market fluctuations based on personal losses. The court dismissed the petition, ruling it as not maintainable.
  
  Issue 2: The court emphasized SEBI's role as a specialized body for regulating the stock market. It noted that SEBI is responsible for determining when and where investigations are necessary. The court highlighted that fluctuations in stock prices can be influenced by various factors, and individual shareholders cannot dictate SEBI's investigative actions based on personal financial outcomes. The court dismissed the petition, stating that it cannot direct SEBI to conduct investigations into stock market activities based on individual complaints.
  
  Issue 3: The court addressed the nature of public interest litigations (PILs) related to stock market matters. It stated that PILs concerning stock market fluctuations, such as allegations of price manipulation, cannot be entertained by the court. The court highlighted that the petitioner's complaint was akin to a PIL and ruled that such matters fall outside the court's jurisdiction for entertaining petitions. Consequently, the court dismissed the petition, deeming it not maintainable based on the principles governing PILs.

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• 2008 (2) TMI 628
  

  Cognizance of the offence under section 224(7) by Metropolitan Magistrate - Held that:- It is futile on the part of learned counsel for the respondent to invoke section 473 of the Code of Criminal Procedure for more than one reason. The order dated 6-1-2005, of the learned Additional Chief Metropolitan Magistrate, Delhi, nowhere mentions any such contention having been raised by the complainant-Registrar of Companies. The order does not make any reference either to section 468 or 473 of the Code of Criminal Procedure.

  Secondly, the explanation offered in the complaint is only that the complaint could not have been filed without the prior sanction of the Regional Director, Kanpur, which was received on 9-9-2003. The complaint still does not offer any explanation for the delay in the Regional Director, Kanpur, according sanction although the Department of Company Affairs was made aware of the contravention on 15-6-2002, by M/s. T.S. Kakkar and Co. Further, they had the company’s reply dated 25-11-2002, to the show-cause notice issued to it. The complaint also does not explain the delay of more than one year after the grant of sanction in the Registrar of Companies filing its complaint in the court of the learned Additional Chief Metropolitan Magistrate, Delhi.

  Thus the learned Metropolitan Magistrate ought not to have taken cognizance of the offence under section 224(7) of the Act as it was beyond the period of limitation stipulated under section 468(2)(a) of the Code of Criminal Procedure. Petition allowed.

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• 2008 (2) TMI 627
  

  Whether the order dated 26-9-2006 of the CLB refusing to refer parties to arbitration under section 45 of the Arbitration Act was liable to be challenged to the forum under section 50 of the Arbitration Act or to the forum under section 10(1)(a) of the Companies Act?

  Held that:- Appeal dismissed. We are satisfied that the appellant has wrongly based its arguments on matters such as ouster of jurisdiction, overriding effect of special statute over general statute, overriding effect of subsequent statute etc. Since they have no application whatsoever to the matter in issue, there is no need to refer various decisions in those aspects. Ouster of jurisdiction arises only in regard to original jurisdiction and it cannot have any application to appellate jurisdiction as the one provided in section 50 of the Arbitration Act. The appeal is a statutory remedy and it can lie only to the specified forum. The appellate forum cannot be decided on the basis of cause of action as applicable to original proceedings such as suit which could be filed in any court where part of cause of action arises. Thus unable to accept the lengthy arguments advanced on the above-mentioned subject by the appellant. Likewise, the submission of the appellant, namely, the Arbitration Act being a special and subsequent statute has no relevance to the present case.

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