Reopening of assessment u/s 147 - Whether reasons as recorded do not indicate any reason to believe that income chargeable to tax has escaped assessment? - HELD THAT:- The reasons, as recorded merely indicate that there was client code modification which lead to a non genuine loss. The reasons do not indicate, how the aforesaid facts led to the AO having reason to believe that income chargeable to tax has escaped assessment. Therefore, prima facie there is absence of link between information obtained and escapement of income chargeable to tax. Thus, the reasons, as recorded, do not prima facie indicate the reasons to believe that income chargeable to tax has escaped assessment.
The contention on behalf of the Revenue that this would be done at the time of assessment, does not satisfy the jurisdictional requirement of AO having reason to believe that the income chargeable to tax has escaped assessment at the time of issuing the impugned notice.
Seeking sanction of Composite Scheme of Arrangement and Amalgamation - sections 391-394 of the Companies Act, 1956 - HELD THAT:- Various directions with regard to dispensing with various meetings issued - application allowed.
Direction issued to restrict the selection of Assistant Prosecuting Officers only to the number of posts that were advertised - HELD THAT:- The Appellants participated in the selection which was initially for 38 posts which later increased to 74 posts. They could not be appointed due to the judgment of the High Court which directed the selection to be only for 38 posts. In view of there being no fault on the part of the Appellants, we examined whether we could exercise our judicial discretion to direct their appointments. We realise that any such direction given by us for their appointments would be contrary to the Rules. Judicial discretion can be exercised by a Court only when there are two or more possible lawful solutions. In any event, Courts cannot give any direction contrary to the Statute or Rules made thereunder in exercise of judicial discretion.
The selection pursuant to the advertisement dated 19.09.2009 should be confined only to posts that were advertised, the additional posts that were created after the expiry of the recruitment year shall be filled up by issuance of an advertisement afresh. In view of the shortage of Assistant Prosecuting Officers in the State of Uttarakhand, we direct the authorities to expedite the process of selection.
Assessment u/s 153A - valid initiation of search - assessee has challenged execution of warrants and also whether valid search was initiated in this case? - HELD THAT:- Search will be deemed to be concluded on the basis of last panchnama drawn in relation to the person in whose case the warrant of authorization has been issued and in the instant case , we have observed that no panchnama was drawn against the assessee so it can be concluded that search against the assessee got vitiated as no panchnama was ever prepared against the assessee. The search is a serious invasion into the privacy of the person infringing on fundamental rights as enshrined in Article 21 of the Constitution of India and the same cannot be lightly carried out by the State in an casual or lax manner. The Revenue has prepared the Panchnama in the name of ‘Manoj B Punmia and group’ while there is no concept of word ‘group’ in the Act in context of search proceedings.
Incidentally in the instant appeal , there is no panchnama drawn by the Revenue against the present assessee which is an admitted position. Keeping in view the facts and circumstances of the case, we are of considered view that the search proceedings in the case of present assessee got vitiated due to non-preparation of the panchnama in the name of the assessee which evidences conclusion of the search and which effectively decides against whom the Revenue has conducted search so much so further actions are required to initiate assessment proceedings u/s 153A of the Act for the last six years against the person so searched within the time stipulated u/s 153B.
Thus, in the absence of panchnama being drawn against the assessee, no incriminating material having been found pertaining to the assessee and also the premises searched did not belonged to the assessee, it could be concluded based on the cumulative effect of all the above-stated relevant facts that no valid search was conducted against the assessee and the assessment u/s 153A of the Act is bad in law hence liable to be quashed. Why, despite a ‘search’, we observe a ‘notice’ u/s 153C as well as a survey being conducted on the assessee in the present case.
Disallowance made on account of unexplained purchases to 50% - Since, we have declared the proceedings u/s 153A as null and void, these appeals for impugned assessment years have also remained for academic interest only. Since, the basis for making the assessment/reassessment has been declared as null and void, therefore, the same ratio will be applicable to the appeals of the Revenue also, consequently, dismissed, therefore, these appeals are also decided in favour of the assessee.
Incriminating material found during the course of search or not? - The assessee company had filed return of income on 20-10-2004 u/s 139(1) of the Act. The time limit for service of notice u/s 143(2) of the Act for the said relevant period was till the expiry of twelve months from the end of the month in which the return is furnished i.e. up-to 31-10- 2005. The search was initiated on 31-10-2009 and hence the period with in which Revenue could have issued notice u/s 143(2) of the Act to frame assessment under Section 143(3) of the Act has already expired and hence the assessment for the impugned assessment year is a concluded assessment as stipulated u/s 153A of the Act on the date of search on 31- 10-2009. Thus, as per mandate of Section 153A of the Act the concluded assessment can be re-opened for framing assessment u/s 153A of the Act provided there is an incriminating material found during the course of search. Since, in the instant case no incriminating material was during the course of search against the assessee company for the impugned assessment year, no additions can be sustained. - Assessee appeal allowed.
Disallowance under section 14A r.w.r 8D towards expenditure incurred for earning exempt income while computing tax under section 115JB - computing the “book profit” of the company under section 115JB of the Act which is a section with fiction another provision with fiction such as section 14A cannot be imported - HELD THAT:- As relying on M/S. BEACH MINERALS COMPANY PVT LTD [2015 (8) TMI 1031 - ITAT CHENNAI] held that while computing the “book profit” of the company under section 115JB of the Act which is a section with fiction another provision with fiction such as section 14A cannot be imported - we hereby hold that in the case of the assessee provisions of section 14A cannot be invoked for the purpose of computing tax under section 115JB of the Act. Thus, this ground raised by the assessee is held in its favour.
Disallowance being the compensation paid for delayed commissioning of windmills - HELD THAT:- For the relevant assessment year, it appears that the assessee had promised compensation to its sister concerns which are loss making concerns. The apprehension of the Revenue is that the assessee had promised such payments to its clients who are its sister concerns in order to shift its profit to those companies which are loss making companies. Therefore in order to ascertain the genuineness of the promised payment, we hereby remit the matter back to the file of the learned Assessing Officer who shall verify the parameters considered by the assessee while paying compensation to its client M/s. Indonet Global Ltd., for the assessment year 2006-07 [2016 (10) TMI 1358 - ITAT CHENNAI] and if the same falls in parity in the case of the assessee for the relevant assessment year, then allow the claim of deduction though the compensation has been shown only as payable, otherwise pass appropriate orders as per law & merit.
Disallowance being the expenses related to issue of FCCB -foreign currency convertible bonds issue expenses - as submitted that the expenditure is allowable under section 37 of the Act because these expenses related to obtaining loan - HELD THAT:- From the facts of the case, we find that the entire expense is incurred by the assessee during the previous year 2006-07 relevant to the assessment year 2007-08. Further, this is an expense incurred for either raising loan or for raising capital. If the expense is incurred for raising loan then the same will be allowed as deduction spread over evenly for the period of loan extended because it is an expenditure related to the financial charge. However, if the amount is incurred for raising capital, then the same will not be allowed as deduction by virtue of the decision of the Hon’ble Apex Court in the case of Brooke Bond India Ltd. Vs. CIT [1997 (2) TMI 11 - SUPREME COURT] Therefore, we hereby remit back the matter to the file of the learned Assessing Officer for fresh consideration in the light of our observations made herein above.
Disallowance being difference in depreciation as per Companies Act - HELD THAT:- It appears that the assessee had claimed higher depreciation than what is prescribed by the Companies Act while computing book profit for the purpose of tax under section 115JB of the Act, the difference of which being Rs.1,36,56,865/-, though the facts are not clearly emerging out of the order of the learned Assessing Officer or the learned Commissioner of Income Tax (Appeals). Since the facts are not clear, we remit back this issue to the file of the learned Assessing Officer for de novo consideration. We also direct the learned Assessing Officer to consider the decision rendered by us in the Revenue’s appeal [2016 (10) TMI 1358 - ITAT CHENNAI] in the case of the assessee’s own case, and if the facts are identical on the issue as discussed of the above said order then pass appropriate in the light of the same.
Addition being the impairment losses charged to P&L A/c as per Accounting Standard-28 for the purpose of determining book profit under section 115JB - CIT-A deleted the addition - HELD THAT:- Section 2(11) (3A) of the Companies Act provides that the profit and loss account and balance sheet of the company shall comply with the accounting standards.
Accounting Standard-28 states that an asset is said to be impaired when carrying amount of the asset is more than the recoverable amount. It further states that such impairment loss on the asset is to be accounted and the asset should be shown in the balance sheet at its cost less depreciation less impairment loss. Precisely the impairment loss has to be written off in the books of accounts by debiting to profit & loss account and crediting to asset account. This is mandatory as per Accounting Standard-28, which every company has to follow while preparing its statement of affairs.
As held by the learned Commissioner of Income Tax (Appeals) there is no whisper in the provisions of section 115JB of the Act for adding back the impairment loss to the profit & loss account of the assessee while computing “book profit” & tax under section 115JB of the Act. Therefore, we do not find it necessary to interfere with the orders of the learned Commissioner of Income Tax (Appeals) on this issue. - Decided against revenue.
Validity of Section 2(11) of the Tamil Nadu Value Added Tax Act, 2006 - rate of tax - interstate movement of goods - Change in nature of goods merely on the basis of the location in which they are used - It was held by Madras High Court that The challenge to the validity of Section 2(11) of the Tamil Nadu Value Added Tax Act, 2006, is rejected and the prayer of the writ petitioners for declaration that Section 2(11) is ultra vires and unconstitutional, is dismissed.
HELD THAT:- There are no reason to interfere with the order passed by the a High Court.
Disallowance of bad debts to the extent of 4/5th u/s 35D - HELD THAT:- From the facts of the case, it is apparent that the loss arising due to the non recoverability of the advances made to M/s. Cicon Environment Technologies Ltd., pertains to the expansion program of the current business of the assessee. Section 35D(1) of the Act clearly stipulates that where the assessee after commencement of its business in connection with the extension of its undertaking or in connection with its setting up of a new unit incur any expenditure after 31st day of March, 1998 towards preparation of feasibility report, preparation of project report and for conducting market survey, then the assessee will be entitled to deduction for an amount equal to 1/5th of such expenditure for each of the five successive previous years. But in the case of the assessee the loss is due to non recoverability of advances made and not for any expenditure incurred by the assessee. Therefore, we are of the considered view that the assessee deserves deduction for the entire loss instead of amortization under section 35D of the Act. Hence, we hereby direct the learned Assessing Officer to treat the amount as business loss and grant deduction provided the debt is written off in the books of accounts of the assessee. Thus, this issue is allowed in favour of the assessee as indicated hereinabove.
Disallowance of compensation payment made for delayed commissioning of windmills - HELD THAT:- We find merit in the contention of the learned Authorized Representative. The amount of Rs.65.00 lakhs paid by the assessee to its client was due to the delay in commissioning of the project and in order to compensate for the loss of profit. Further, the assessee had also received an amount of Rs.3.00 crores as interest free advances for the execution of the project which is also required to be compensated. Considering all these facts and as a result of mutual agreement between the assessee and its client, the assessee had paid Rs.65.00 lakhs as compensation. Such compensation no doubt falls in the revenue field and therefore it has to be allowable as deduction as per section 37 of the Act. Hence, we hereby direct the learned Assessing Officer to delete the addition made on account of the disallowance of Rs.65.00 lakhs in the hands of the assessee. Thus this issue is allowed in favour of the assessee.
Claim of bad debt in respect of advances made to M/s. Soprano Holdings Pvt. Ltd. - HELD THAT:- Assessee's claim of bad debt written off, on account of advance made to M/s. Soprano Holdings P. Ltd., is allowable u/s.28 of the Act. The Assessing Officer is directed to allow the same.
Bad debts allowed to the extent of 1/5th of the total claim - HELD THAT:- Since in the assessee’s appeal herein above, we have allowed the entire deduction of Rs.65.00 lakhs claimed by the assessee, provided it is written off in the books of accounts of the assessee for the relevant assessment year, this ground raised by the Revenue is also disposed off accordingly.
Disallowance of bad debts written off being land advance given to M/s.Wipro Finance Ltd. - HELD THAT:-We are of the considered view that the assessee has incurred loss during the course of its regular business and therefore it is entitled to claim the same as business loss. Therefore, we hereby direct the learned Assessing Officer to delete the addition in the hands of the assessee.
Addition being rupee fluctuation loss on foreign currency convertible bonds - CIT-A ) held that the assessee would be only entitled for deduction on account of rupee fluctuation losses on the FCCBs in the year of actual redemption/ conversion - HELD THAT:- Accounting Standard 11 clearly stipulates that the monetary items such debtors, creditors and loans should be converted at the closing rate and reported as such in the balance sheet by charging the same to the profit & loss account. Accounting Standards are nothing but tools to determine the actual profit or loss incurred by the assessee during the relevant year - in the case of CIT Vs. Woodward Governor India Pvt. Ltd. [2009 (4) TMI 4 - SUPREME COURT] has clearly held that an enterprise has to report outstanding liability relating to import of raw material using closing rate of foreign exchange and any differences, loss or gain arising on conversion of such liability at closing rate should be recognized in the profit & loss account for the reporting period. Therefore, we are of the considered view that the assessee would be entitled for deduction towards the loss incurred provided the provisions of section 43A of the Act relating to change in rate of exchange of currency is not applicable in the case of the assessee. Hence, we hereby direct the learned Assessing Officer to examine the applicability of section 43A of the Act in the case of the assessee and if the same is not applicable allow the claim of deduction or such proportionate amount on which section 43A of the Act is not applicable. It is ordered accordingly.
Additional depreciation - As per AO higher claim of depreciation more than what is prescribed by the Companies Act is not allowable while computing the book profit under section 115JB - HELD THAT:-The circular No.2/89 issued by the Finance Ministry clearly states that any company is entitled to provide higher depreciation in the books based on risk like technological risks perceived by the management, genuine realizable value according to market practice etc.In the case of the assessee, the genuineness of the additional claim of depreciation by the assessee is not disputed.
There is no bar under the Companies Act to charge higher depreciation other than what is recommended under the Companies Act. The Assessing Officer is barred from making any adjustments on the book profit for the purpose of computing tax under section 115JB of the Act other than what is specified in the Act.
Commissioner of Income Tax (Appeals) after considering all these facts has rightly held the issue in favour of the assessee. Therefore, we do not find it necessary to interfere with the order of the learned Commissioner of Income Tax (Appeals).
Entitlement of temporary employees to the minimum of the pay-scale, as was being paid to similarly placed regular employees - whether temporarily engaged employees (daily-wage employees, ad-hoc appointees, employees appointed on casual basis, contractual employees and the like), are entitled to minimum of the regular pay-scale, alongwith dearness allowance (as revised from time to time) on account of their performing the same duties, which are discharged by those engaged on regular basis, against sanctioned posts?
HELD THAT:- This Court held, that the concept of equality implies and requires equal treatment, for those who are situated equally. Comparison between unequals is not possible. Since the workers who had approached this Court had failed to establish, that they were situated similarly as others, they could not be extended benefits which were being given to those, with whom they claimed parity. And therefore, since there were no other employees comparable to the employees working in the Grih Kalyan Kendras, this Court declined to entertain the prayer made by the Petitioners.
This Court, while adjudicating upon the controversy arrived at the conclusion, that the High Court had granted relief to the Respondents on the assumption that two vacant posts of Assistant Engineer were utilized for appointing the Respondents. The above impression was found to be ex-facie fallacious, by this Court. This Court was of the view, that the orders of appointment issued to the Respondents, did not lead to the inference, that they were appointed against the two vacant posts of Assistant Engineer. Despite the above, this Court held, that the decision of the Appellant Corporation to effect economy by depriving the Respondents even, the minimum of pay-scale, was totally arbitrary and unjustified. This Court expressed the view, that the very fact that the Respondents were engaged on a consolidated salary of ₹ 2000 per month, while the prescribed pay-scale of the post of Assistant Engineer in the other branches was ₹ 2200-4000, and that of Junior Engineer was ₹ 1600-2660, was sufficient to infer, that both the Respondents were engaged to work against the posts of Assistant Engineer.
There is no room for any doubt, that the principle of 'equal pay for equal work' has emerged from an interpretation of different provisions of the Constitution. The principle has been expounded through a large number of judgments rendered by this Court, and constitutes law declared by this Court. The same is binding on all the courts in India, Under Article 141 of the Constitution of India. The parameters of the principle, have been summarized. The principle of 'equal pay for equal work' has also been extended to temporary employees (differently described as work-charge, daily-wage, casual, ad-hoc, contractual, and the like). The legal position, relating to temporary employees, has been summarized by us, in paragraph 44 hereinabove. The above legal position which has been repeatedly declared, is being reiterated, yet again.
It is fallacious to determine artificial parameters to deny fruits of labour. An employee engaged for the same work, cannot be paid less than another, who performs the same duties and responsibilities. Certainly not, in a welfare state. Such an action besides being demeaning, strikes at the very foundation of human dignity. Any one, who is compelled to work at a lesser wage, does not do so voluntarily. He does so, to provide food and shelter to his family, at the cost of his self respect and dignity, at the cost of his self worth, and at the cost of his integrity. For he knows, that his dependents would suffer immensely, if he does not accept the lesser wage. Any act, of paying less wages, as compared to others similarly situate, constitutes an act of exploitative enslavement, emerging out of a domineering position. Undoubtedly, the action is oppressive, suppressive and coercive, as it compels involuntary subjugation - in view of the law declared by this Court Under Article 141 of the Constitution of India, the principle of 'equal pay for equal work' constitutes a clear and unambiguous right and is vested in every employee-whether engaged on regular or temporary basis.
There is, therefore, no room for any doubt, that the duties and responsibilities discharged by the temporary employees in the present set of appeals, were the same as were being discharged by regular employees. It is not the case of the Appellants, that the Respondent-employees did not possess the qualifications prescribed for appointment on regular basis. Furthermore, it is not the case of the State, that any of the temporary employees would not be entitled to pay parity, on any of the principles summarized by us in paragraph 42 hereinabove. There can be no doubt, that the principle of 'equal pay for equal work' would be applicable to all the concerned temporary employees, so as to vest in them the right to claim wages, at par with the minimum of the pay-scale of regularly engaged Government employees, holding the same post.
All the concerned temporary employees, in the present bunch of cases, would be entitled to draw wages at the minimum of the pay-scale (-at the lowest grade, in the regular pay-scale), extended to regular employees, holding the same post - Application disposed off.
Eligible for claim of exemption u/s 10(38) with respect to gain/loss on sale of investments - HELD THAT:- It is pointed out that in Assessment Year 2004-05 also the Tribunal vide its order [2013 (10) TMI 1130 - ITAT MUMBAI] followed its earlier decision [2012 (11) TMI 587 - ITAT MUMBAI] and allowed the claim of the assessee. Similarly, in Assessment Years 2005-06 and 2006-07, the Tribunal has upheld its earlier order - It has also been pointed out that in Assessment Year 2007-08 also, the Tribunal vide [2015 (2) TMI 1372 - ITAT MUMBAI] has decided the issue in favour of the assessee. Apart therefrom, the learned representative for the assessee pointed out that the view of the Tribunal is also in consonance with the clarification issued by CBDT vide Circular dated 21.02.2006, which has indeed been referred by the CIT(A) in the impugned order.
Eligible for claiming exemption u/s 10(15) - HELD THAT:- It is seen that the CIT(A) allowed the plea of assessee by referring to the clarification issued by CBDT dated 21.02.2006 whereby it is clarified that exemption available to any other assessee under any of the clauses of Sec. 10 of the Act shall also be made available to a person carrying on non-life insurance business. Apart therefrom, at the time of hearing the learned representative for the assessee has referred to the decision of Tribunal in the case of assessee for Assessment Year 2007-08 2015 (2) TMI 1372 - ITAT MUMBAI] wherein similar issue has been decided in favour of the assessee following precedents in the case of ICICI Prudential Insurance Co. Ltd. [2012 (11) TMI 13 - ITAT MUMBAI] and New India Assurance Co. Ltd. [1967 (10) TMI 16 - BOMBAY HIGH COURT] - Decided in favour of assessee.
Disallowance u/s 40A(3) for Freight Outward Expense and for freight Inward Expense - HELD THAT:- It is an undisputed fact that the genuineness of the payments have not been doubted by the revenue authorities. It is also an admitted fact that the assessee has deducted tax at source from the applicable rates and the TDS has been deposited in the government account. It is also an admitted fact that the nature of business of the assessee is such that it has to hire transport operators for the movement of its goods, raw material as well as finished.
We have no hesitation to hold that in the present case also neither the genuineness of the payment nor the identities of the payee were in any case doubted. Considering the totality of the facts qua the business of the assessee, we do not find any merit in the additions made u/s. 40A(3) of the Act. We, accordingly, set aside the findings of the ld. CIT(A) and direct the AO to delete the impugned additions. - Decided in favour of assessee.
The Appellate Tribunal ITAT Amritsar dismissed the appeal filed by the assessee against the order of CIT(A) for the assessment year 2009-10 as the assessee requested withdrawal of the appeal, which was allowed. The appeal was dismissed as withdrawn on 20/10/2016.
Effect of depriving the Petitioners and their representatives of the exercise of their rights to have an absolute say on the hiring and dismissal of employees of the Society - seeking direction to Respondents through their directors, officers, agents, representatives and employees to cease and desist from interfering with any aspect of the hiring and dismissal rights of the Petitioners - payment of salaries to Dr. C.S. Sharma and/or take necessary steps to effect prompt payments of salaries to any other employees hired by the Society - seeking restraint on Respondents No. 1 and 2 including through their affiliates, related parties, directors, officers, agents, representatives and employees from taking any steps whatsoever in contravention of clause 3.1.2 of the Share Purchase Agreement.
Interpretation of statute - Section 26 of the Amendment Act - Whether the provisions of the Amendment Act are applicable to the present proceedings? - HELD THAT:- Section 26 expressly provides that nothing in the Amendment Act would apply to pending arbitral proceedings. The proposal that the Amendment Act shall apply only to fresh arbitrations was accepted as is plainly evident from the language of the latter part of Section 26 of the Amendment Act. No. specific provision was enacted with regard to the applicability of the amendment to "fresh applications". However, it was enacted that the Amendment Act would come into force from 23.10.2015 and therefore would be plainly applicable to the proceedings instituted after the said date.
Whether by virtue of the proviso introduced in Section 2(2) of the Act, recourse to Section 9 of the Act is available in relation to the arbitral proceedings? - HELD THAT:- In the present case, there is no dispute as to the law governing the arbitration. Clause 15.1 of the Agreement expressly provides that the laws as applicable in Singapore will apply to the entire contract. Further the seat of the arbitration is also in Singapore. The petitioners had also applied under Section 12(6) of the International Arbitration Act, (IAA) - the law as applicable to the International Arbitration in Singapore - for the judgment in terms of the order passed by the Arbitral tribunal.
Whether an agreement between the parties that a foreign law would be applicable to the arbitration, implicitly excludes the applicability of Section 9 of the Act? - HELD THAT:- The very purpose of amending Section 2(2) of the Act was to enable a party to approach the courts in India for interim relief in respect of the arbitral proceedings held or to be held outside India - The Article 17-J of the Model Law specifically provides that the Court shall have the same powers for issuing interim measures in relation to the arbitral proceedings irrespective of the seat of such arbitral proceedings. In terms of the UNCITRAL Model Law, arbitral proceedings are governed by the law as applicable at the seat of the arbitration; nonetheless, it would be open for the Courts to issue interim orders even in respect of the arbitral proceedings that are held outside the State. The object of amending Section 2(2) of the Act is inter alia to incorporate such provision in the Act.
The SIAC Rules are clearly in conformity with the UNCITRAL Model Law and permit the parties to approach the Court for interim relief. As pointed out earlier, UNCITRAL Model Law expressly provides for courts to grant interim orders in aid to proceedings held outside the State. And, the proviso to Section 2(2) of the Act also enables a party to have recourse to Section 9 of the Act notwithstanding that the seat of arbitration is outside India. Thus, the inescapable conclusion is that since the parties had agreed that the arbitration be conducted as per SIAC Rules, they had impliedly agreed that it would not be incompatible for them to approach the Courts for interim relief. This would also include the Courts other than Singapore. It is relevant to mention that IAA is based on UNCITRAL Model Law and SIAC Rules are also complimentary to IAA/UNCITRAL Model law - the contention that the parties by agreeing that the proper law applicable to arbitration would be the law in Singapore have excluded the applicability of Section 9 of the Act.
Whether the petitioner can approach this Court for an interim relief considering that it has already approached the Arbitral Tribunal in Singapore and thereafter, also obtained a judgment in terms of the interim order from the Singapore High Court? - HELD THAT:- It is relevant to mention that Article 17H of the UNCITRAL Model Law contains express provisions for enforcement of interim measures. However the Act does not contain any provision pari materia to Article 17H for enforcement of interim orders granted by an Arbitral Tribunal outside the India. Section 17 of the Act is clearly not applicable in respect of arbitral proceedings held outside India - the emergency award passed by the Arbitral Tribunal cannot be enforced under the Act and the only method for enforcing the same would be for the petitioner to file a suit.
A party seeking interim measures cannot be precluded from doing so only for the reason that it had obtained a similar order from an arbitral tribunal. Needless to state that the question whether the interim orders should be granted under section 9 of the Act or not would have to be considered by the Courts independent of the orders passed by the arbitral tribunal. Recourse to Section 9 of the Act is not available for the purpose of enforcing the orders of the arbitral tribunal; but that does not mean that the Court cannot independently apply its mind and grant interim relief in cases where it is warranted - It is relevant to note that the provisions under Article 17 I (2) of the Model Law, the court enforcing an interim order passed by an Arbitral Tribunal in prescribed form undertakes a review of the substance of interim measure the Model Law. To that extent, a Court while examining a similar relief under Section 9 of the Act would be unfettered by the findings or the view of the Arbitral Tribunal.
Constitutional validity of Section 2(q) of the Protection of Women from Domestic Violence Act, 2005 - Domestic violence - protection of the female sex generally - what exactly is the object sought to be achieved by the 2005 Act? - HELD THAT:- A cursory reading of the statement of objects and reasons makes it clear that the phenomenon of domestic violence against women is widely prevalent and needs redressal. Whereas criminal law does offer some redressal, civil law does not address this phenomenon in its entirety. The idea therefore is to provide various innovative remedies in favour of women who suffer from domestic violence, against the perpetrators of such violence - What is of great significance is that the 2005 Act is to provide for effective protection of the rights of women who are victims of violence of any kind occurring within the family. The preamble also makes it clear that the reach of the Act is that violence, whether physical, sexual, verbal, emotional or economic, are all to be redressed by the statute. That the perpetrators and abettors of such violence can, in given situations, be women themselves, is obvious.
A conspectus of these judgments also leads to the result that the microscopic difference between male and female, adult and non adult, regard being had to the object sought to be achieved by the 2005 Act, is neither real or substantial nor does it have any rational relation to the object of the legislation. In fact, as per the principle settled in the Subramanian Swamy judgment [2014 (5) TMI 783 - SUPREME COURT], the words "adult male person" are contrary to the object of affording protection to women who have suffered from domestic violence "of any kind" - the words "adult male" before the word "person" in Section 2(q) are struck off, as these words discriminate between persons similarly situate, and far from being in tune with, are contrary to the object sought to be achieved by the 2005 Act.
Having struck down these two words from the definition of "Respondent" in Section 2(q), the next question that arises is whether the rest of the Act can be implemented without the aforesaid two words. This brings us to the doctrine of severability - a doctrine well-known in constitutional law and propounded for the first time in the celebrated R.M.D. Chamarbaugwalla v. Union of India [1957 (4) TMI 56 - SUPREME COURT]. This judgment has been applied in many cases. It is not necessary to refer to the plethora of case law on the application of this judgment, except to refer to one or two judgments directly on point.
An application of the severability principle would make it clear that having struck down the expression "adult male" in Section 2(q) of the 2005 Act, the rest of the Section is left intact and can be enforced to achieve the object of the legislation without the offending words. Under Section 2(q) of the 2005 Act, while defining 'Respondent', a proviso is provided only to carve out an exception to a situation of "Respondent" not being an adult male. Once 'adult male', is struck off, the proviso has no independent existence, having been rendered otiose.
Having struck down a portion of Section 2(q) on the ground that it is violative of Article 14 of the Constitution of India, it is not deemed necessary to go into the case law cited by both sides on literal versus purposive construction, construction of penal statutes, and the correct construction of a proviso to a Section. None of this becomes necessary in view of our finding above.
It is declared that the words "adult male" in Section 2(q) of the 2005 Act will stand deleted since these words do not square with Article 14 of the Constitution of India. Consequently, the proviso to Section 2(q), being rendered otiose, also stands deleted - appeal disposed off.
Addition on account of guest fees and hire charges - HELD THAT:- As decided in own case [2013 (1) TMI 1031 - ITAT AHMEDABAD] Revenue has not brought any contrary binding decision in its support nor has placed any material on record to demonstrate that the decisions of the Tribunal in assessee’s own case for AY 200-07 has been set aside by Hon’ble Jurisdictional High Court. We further find that reliance placed by the Revenue in the case of Sports Club of Gujarat Ltd. vs. CIT [1987 (10) TMI 21 - GUJARAT HIGH COURT] are on different facts and, therefore, the ratio of the judgement is not applicable to the facts of the present case. In view of the aforesaid facts, we find no reason to interfere with the order of the ld.CIT(A) and thus the ground of Revenue is dismissed.
Disallowance of deduction claimed from income from other sources u/s 57(iii) - disallowance on account of 'income from other sources' u/s57 which Assessee failed to prove to have been incurred wholly & exclusively for the purpose of earning such interest income - HELD THAT:- As from A. Y. 1989-90 onwards, the issue had become settled i.e. the interest income would be charged as income from other sources and 10% of the same would be allowed as deduction for concerned expenses. In the A. Y. 2010- 11, the AO is raking up the controversy after 20 years on the issue which has not been agitated by either of the side. This is not the new issue to my mind, therefore, the principle of consistency required to be followed as has been held in various below mentioned case laws DCIT Vs. Sulabh International Social Service Organisation [2011 (3) TMI 526 - PATNA HIGH COURT] CIT Vs. Ranganathar & Co. [2007 (8) TMI 338 - MADRAS HIGH COURT] Gopal Purohit [2010 (11) TMI 222 - SC ORDER] Thus disallowance made by the A. O. is hereby deleted.
Looking to the facts of the present case we find that assessee has been claiming 10% of the interest income and the same has been consistently allowed for last so many years. Therefore, we find no reason to interfere with the order of ld. CIT(A). We uphold the same. This ground of Revenue is also dismissed.
Correct head of income - short term gain v/s business income - whether the STCG on transaction of purchase and sale of units of mutual funds and shares undertaken by the assessee during the previous year is to be assessed under the head ‘income from business’ as claimed by the revenue or income under the head ‘capital gain’ as contended by the assessee? - HELD THAT:- It is not in dispute that the shares and mutual funds that were sold during the previous year, which resulted in the income in question, were held by the Assessee as “Investments” and not as “Stock-in-trade”. The assessee during the previous year had entered into 490 transactions of purchase and 646 transactions of sale of shares, units of mutual funds. Out of the above in respect of 207 transactions the sale was made within 30 days of purchase. The question is as to whether the volume and frequency can for the basis for drawing an inference that the Assessee was engaged in business. The Hon’ble ITAT Mumbai Bench i
In the case of Janak S.Rangwala Vs. ACIT [2006 (12) TMI 261 - ITAT MUMBAI] has held that magnitude of the transaction does not alter the nature of the transaction. As we have already seen it is not in dispute that the Assessee had treated the shares and units as investments in its books of accounts. Similar transactions have been accepted by the revenue in assessments for AY 2005-06 as giving raise to capital gains and not as business income in the assessment completed u/s.143(3) of the Act after scrutiny. There was no borrowing by the Assessee out of which investment in shares and units were made.
As we have already seen that the AO in AY 05-06 accepted similar income as capital gain. Even for AY 2006-07 the AO accepted the claim of the Assessee and it was only pursuant to the order u/s.263 of the Act, the AO took a different view. It is not disputed by the revenue that the facts and circumstances in the AY 05-06 and the present AY 2006-07 are identical. Though the rule of res judicata is not applicable in income tax proceedings but the principle of consistency will definitely apply and on that basis the claim of the Assessee should be held to be proper. - Decided against revenue.
Deduction u/s.80IA - HELD THAT:- A coordinate Bench of this Tribunal in the case of Assessee’s own case in respect of AY 2003-04 confirmed the finding of the learned CIT(A) to the effect that the Assessee is entitled to the deductions under section under section 80-IA of the Act. Rule of consistency, as laid down in CIT Vs. N.P.Mathew [2005 (5) TMI 13 - KERALA HIGH COURT] demands that the department should adopt consistent approach on an issue in respect of the same Assessee in different years. While respectfully following above we find that the findings of the learned CIT(A) on this aspect are proper and legal. No need to interfere with the same. Hence these grounds are dismissed.
Disallowance of the expense u/s. 14A - HELD THAT:- These appeals relating to the assessment years 2004-05 and 2005-06 to which years Rule 8D of the Rules has no application. Rule of consistency, as laid down by the Hon’ble Kerala High Court in CIT Vs. N. P. Mathew [2005 (5) TMI 13 - KERALA HIGH COURT] demands that the same approach should be adopted in respect of the same assessee in different years. While respectfully following the decision of the coordinate bench of this Tribunal referred supra, we hold that the findings of the Ld. CIT(A) in the impugned orders on this ground needs no interference.
Disallowance of the telephone expenses to an extent of 5% - Addition by the AO on the ground that the expenses on account of personal calls by the employees of the company were debited and also the expenses for residential phones and mobile phones were claimed - HELD THAT:- On this aspect, the assessee relied on the decisions reported in Sayaji Iron & Engg. Co. [2001 (7) TMI 70 - GUJARAT HIGH COURT] and Intersil India Ltd. [2004 (10) TMI 595 - ITAT MUMBAI] and it is submitted that since the assessee is a corporate entity, there cannot be any personal expenditure. It is further submitted that in respect of AY 2005-06 the Ld. CIT(A) deleted such an addition based on ad hoc disallowance in the telephone expenses and the department has not preferred any appeal against such finding. On a careful consideration of the orders of the authorities below the judgments cited by the assessee and also in view of the fact that as against the deletion of the disallowance of a portion of telephone charges the department preferred no appeal, we find that the order of the Ld. CIT(A) is consistent with the judgment of the Hon’ble Kerala High Court in N. P. Mathew, supra and we uphold the same. This ground is dismissed accordingly.
Allowability of club expenditure - HELD THAT:- As balance amount relating to club services may be allowed as business expenditure. In view of the decision of Hon’ble Supreme Court in CIT Vs. United Glass Manufacturing Co. Ltd. [2012 (9) TMI 914 - SUPREME COURT] the membership expenses of the club incurred by the assessee are allowable as deduction u/s. 37(1) - AR fairly conceded that club membership is to the individual whereas the expenditure relating to club services and entrance fee are for business purpose. In these circumstances, we uphold the disallowance of the expenditure relating to the club membership for both the assessment years. However, disallowance in respect of the club services are the entrance fee are relatable to the United Glass Manufacturing Co. Ltd., [2012 (9) TMI 914 - SUPREME COURT] we delete the disallowance relating to the club services and entrance fee. To this extent these two grounds of cross objections of assessee are allowed in part.
Revision u/s 263 - as per CIT AO has allowed (i) depreciation @ 60% on additions made to computers and its peripherals in the depreciation schedule and also (ii) depreciation on intangible asset, though the asset was not completed and still is in the state of progress i.e. pre-operative stage - HELD THAT:- As during the assessment proceedings u/s 143(3) of the Act, the AO had issued a notice u/s 143(3) along with a questionnaire wherein item Nos.3 & 4, the assessee was directed to furnish the bills/invoices for additions made to computers and vehicles along with the bank a/c statement and fixed asset schedule and the composition of the capital work in progress and also as to when the capital was used for business purposes and the sources for the purchase of the capital work in progress. W
Assessee has given the schedule of fixed assets wherein the capital work in progress was shown as ₹ 1.65 crores. These details are also available at page 28 of the paper book wherein break-up of the details of capital work in progress was given. Thus, it is seen that the AO had called for details and the assessee has furnished the same before the AO. Therefore, the presumption to be drawn is that the AO has applied his mind to the said details, but has not mentioned anything in the assessment order
In the case before us the CIT, though has found the assessment order to be erroneous on the ground that the AO has not made further inquiries, has not given a finding as to how the assessment order has caused prejudice to the interest of the Revenue. For initiating the revision proceedings u/s 263 CIT should be satisfied that the assessment order is both erroneous as well as prejudicial to the interests of the Revenue. After going through the material on record, we find that the assessee has provided all the details and the AO has applied his mind to the said details and therefore, and the assessment order is not erroneous and there is no prejudice caused to the Revenue. As both the conditions for revision are not satisfied, the revision order is not sustainable and hence set aside. - Decided in favour of assessee.
Maintainability of petition - availability of alternative efficacious remedy available by way of preferring appeal before the Debts Recovery Appellate Tribunal - It is submitted that to avoid payment of Court Fees of statutory appeal, writ is filed - requirement to comply with the Stamp Act - whether the learned Tribunal has any jurisdiction to issue directions with respect to the loan documents and the Assignment Agreement namely directing the Registry to send the copy of the loan documents available in the case record to the Collector of Stamp, Gujarat and to send the copy of the Assignment Agreement to the Chief Controlling Revenue Authority, Gandhinagar and directing the Collector of Stamp, Gujarat to call upon the original documents and directing the Chief Controlling Revenue Authority to call upon the original Assignment Agreement dated 28.03.2014 from ARCIL for further process?
HELD THAT:- Identical question came to be considered by the Hon’ble Supreme Court in the case of CHILAKURI GANGULAPPA VERSUS REVENUE DIVISIONAL OFFICER, MADANPALLE AND ORS. [2001 (3) TMI 1069 - SUPREME COURT]. In the said decision the Hon’ble Supreme Court has observed and held that the Court has powers to admit the document in evidence if the party producing the same would pay the stamp duty together with a penalty amounting to ten times the deficiency of the stamp duty. It is further observed that when the Court chooses to admit the document on compliance of such condition the Court need forward only a copy of the document to the Collector, together with the amount collected from the party for taking adjudicatory steps. But if the party refuses to pay the amount aforesaid the Collector has no other option except to impound the document and forward the same to the Collector and on receipt of the document through either of the said avenues the collector has to adjudicate on the question of the deficiency of the stamp duty - In the present case none of the procedure as required to be followed under the provisions of the Stamp Act more particularly contemplated under Sections 33, 34, 37 and 39 has been followed.
In the present case, original of neither the loan documents nor the Assignment Agreement dated 28.03.2014 are on record. Considering the provisions of the Stamp Act reproduced, production of the original documents are prerequisite - Under the circumstances, directions issued by the learned Tribunal to the Stamp Authorities to impound the instruments and adjudicate the stamp duty thereon, are wholly without jurisdiction. The learned Tribunal has no jurisdiction whatsoever to issue such directions to the Collector of Stamp, Gujarat and the Chief Controlling Revenue Authority.
Considering the facts of the case on hand and the manner in which the learned Tribunal has dismissed the original application at this stage on the aforesaid grounds i.e. on the ground that the loan documents as well as the Assignment Agreement dated 28.03.2014 are insufficiently stamped and therefore, not admissible in evidence and that too without following any procedure as required under the provisions of the Stamp Act, impugned orders dismissing the original applications on the aforesaid grounds are wholly without jurisdiction and cannot be sustained - this is a fit case to exercise powers under Articles 226/227 of the Constitution of India.
Locus of AIRCL to maintain the original application for recovery of its dues - whether in the facts and circumstances of the case the learned Tribunal is justified in dismissing the original application on the ground that as the Assignment Agreement dated 28.03.2014 is in favour of the ARCILASTIV Trust and in favour of the ARCIL as a Trustee of the aforesaid Trust? - HELD THAT:- When there are serious contentious issues with respect to locus of ARCIL to maintain / continue to maintain the suit before the learned Tribunal for recovery of the dues under the Assignment Agreement dated 28.03.2014 visavis under the Securitization Act as well as RDB Act, the learned Tribunal has materially erred in dismissing the original applications on the aforesaid ground and that too at this stage and the learned Tribunal ought to have permitted the parties to raise the aforesaid issues at appropriate stage of trial and the learned Tribunal ought to have considered the aforesaid issues at appropriate stage but not at this stage and ought not to have dismissed the applications at the threshold - the impugned orders passed by the learned Tribunal dismissing the original applications on the aforesaid ground at this stage cannot be sustained and the same deserves to be quashed and set aside.
This is a fit case to exercise powers under Articles 226/227 of the Constitution of India and the present petitions are not required to be dismissed on the ground of availability of alternative statutory remedy by way of appeal before the learned Debts Recovery Appellate Tribunal more particularly when the issues involved in the petitions are questions of law - Application allowed.
Deduction under section 80IB(10) - date of 'commencement’ of the housing project for the purposes of the claim of deduction - HELD THAT:- This aspect of the controversy stands covered by the decision of the Tribunal [2014 (6) TMI 1060 - ITAT MUMBAI] on the basis of the earlier approval obtained by M/s. Gas Property Developers, which has already lapsed, and the expenses were on account of repair of boundary wall the project cannot be stated to have been commenced before 01.10.1998. Therefore, we find no infirmity In the findings recorded by the learned CIT(A) that the AO was wrong in holding that the housing project of the assessee had commenced before 01.10.1998. We uphold his order.
As assessee pointed out that housing project consisted of seven buildings and in respect of A,B,C,D,E,F and G wings occupancy certificates were obtained and possession handed over to flat purchasers who started residing in the allotted flats. It is pointed out that the occupancy certificate issued by the Local Authorities clearly proves that the work in respect of the habitable area of the housing project was complete in all respects. All these facts have not been controverted before us, and the same have been duly considered and accepted by the Tribunal in its order dated 23/9/2016(supra) for assessment year 2011-12.
In view of the precedent in the case of assessee for assessment year 2009-10(supra) and assessment year 2011-12(supra), wherein identical situation in relation to the very same project has been considered, we find no reason to interfere with the decision of the CIT(A) in allowing the claim of the assessee, which is in line with the aforesaid precedents. As a consequence, on this aspect also, the order of the CIT(A) is affirmed and Revenue fails.
Levy of VAT - sale of repossessed cars by assessee/Bank - penalty - HELD THAT:- In identical circumstances this court in its judgment reported as Citi Bank vs. Commissioner of Sales Tax [2015 (12) TMI 1040 - DELHI HIGH COURT] had ruled against the assessee.
In the present case, levy of penalty is above 150%. The main question of law is answered against the assessee.
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